Earl Warren: Carl Schnell et al., versus Peter Eckrich & Sons, Number 219.
Charles J. Merriam: If the Court --
Earl Warren: Mr. Merriam
Charles J. Merriam: Thank you, Mr. Chief Justice and if the Court please, this case arose from two patent infringement cases brought in Fort Wayne, Indiana against Peter Eckrich & Sons, who were -- who were and are an Indiana corporation and resident in Fort Wayne and against the Allbright-Nell Company which was an Illinois corporation having its main place of business in Chicago and not normally subject to service of process in Indiana. During the -- there -- there are two cases because one patent issued after the first and was started and was joined in the second case. During the progress of the case was it developed that the Allbright-Nell Company was defending the litigation and controlling it in accordance with a contract which is set forth on Page 2 of the record. Under that contract, it had the right to defend the case to the exclusion of Peter Eckrich and it agreed also to pay all of the damages and costs that might be awarded in that proceeding. Because of that contract and because of the admission that it was in fact defending, proceedings were undertaken to force the Allbright-Nell Company to answer and it was served in Illinois. And after that service, it moved to quash the service to the summons of subpoenaing and that motion was granted on the ground that merely defending the case did not constitute a general appearance and thereby bind Allbright-Nell Company to be sued in a District Court, it was not ordinarily subject to sue. The Court however gave no opinion and granted an interlocutory appeal in both cases which were then taken to the Court of Appeals for the Seventh Circuit which decided two-to-one to affirm the District Court and the petition was taken from that decision of the Court. It's our position here that a defendant so named, who after being named as a defendant in the case, continues to control its defense. In this case, they even instituted a counter claim in the name of Peter Eckrich asking for attorney's fees, which would have come to the Allbright-Nell Company, is in fact a party and has entered a general appearance in the case. It is conceded by our opponents and there's no dispute in the Court that Allbright-Nell Company would be bound by the decision under res judicata. That is not contested and I think that perhaps the most pertinent thing in that point is to explore what this Court said way back in Lovejoy against Murray, in 3 Wall. 1,18, was the reason for finding a res judicata against a person who was not a named party. And the language of the case which is -- the case is referred to by our opponents, it's not in our brief, but the language is so good that it appears to me that it might be well to read just a couple of sentences. The Court in quoting from Greenleaf on evidence said, "Justice requires that every cause be once fairly and impartially tried, but the public tranquility demands that having once -- having been once so tried, all litigation of that question and between the same parties should be closed forever." And then they, I skip a little bit, "Under the term “parties” in this connection, the law includes all who are directly interested in the subject matter and had a right to make defense or to control the proceedings and to appeal from a judgment." This right involves also the right to adduce testimony and to cross examine it, examine the witnesses adduced on the other side.
Earl Warren: What is that case Mr. --
Charles J. Merriam: That is Lovejoy against Murray, 3 Wall. 1, 18. It is cited in the brief of our opponents and it is also approved in another case cited by our opponents, the Souffront case in 217 U.S. 475. In other words, if we go back to establish the basis upon which res judicata is established in this case, and it is admitted that it is here, is because the party who is so estopped is in fact a party and should be treated as one. And if that is so, it is our position that when he comes into a case as the Allbright-Nell Company has done here, takes over the control of the defense, examines our witnesses and his own, he should be subject to the right of discovery on our part and he should be subject to the right not to be bothered by other suits brought by him. And as was shown in -- in petition for certiorari 389 which is still pending before this Court, the Allbright-Nell Company did institute a declaratory judgment suit in Illinois on one of the -- on the reissue of one of the patents involved in this case. And it's our position that that kind of thing ought not to be permitted merely by dodging behind the unanimity which the defendant has here in effect established by not intervening as he has a right to do under Rule 24 of the Rules of Civil Procedure. Rule 17 of course says that the case shall be prosecuted in the name of the real party in interest and I gather from the language of the heading which applies both to plaintiffs and defendant that the word “prosecute” is intended to cover both a plaintiff and a defendant. At any rate, the filing of a counter claim here asking relief for the benefit of the Allbright-Nell Company would seem to well bind it within Rule 17.
Felix Frankfurter: Of the -- the respondent isn't a real party in interest, is he? I mean he can -- if he is the real party in interest or -- and you try to sue him on that basis, you wouldn't have succeeded, would you?
Charles J. Merriam: I think we would, Mr. Justice Frankfurter.
Felix Frankfurter: In this case? Could there be jurisdiction?
Charles J. Merriam: Well, not jurisdiction in that state, no.
Felix Frankfurter: Well, All right.
Charles J. Merriam: -- no right. But the --
Felix Frankfurter: That's my point and you're really -- the whole controversy is centered around the venue provision and whether or not it's been waived.
Charles J. Merriam: Well, I think that's so.
Felix Frankfurter: Therefore, and I don't see how to talk about real party in interest helps you any because if it is a real party in interest, then certainly you haven't got venue in the Seventh Circuit.
Charles J. Merriam: In the -- in Indiana we would've in --
Felix Frankfurter: In Indiana.
Charles J. Merriam: -- and in Illinois which is still the same circuit.
Felix Frankfurter: I beg your pardon. Would you?
Charles J. Merriam: No, we would not if we had sued merely the Allbright-Nell Company in Indiana.
Felix Frankfurter: Although in -- in the sense it is the real party in interest to this litigation?
Charles J. Merriam: That's right.
Felix Frankfurter: So that's -- what that looks to me is that either have a technical question, isn't it? We've had interchangeably used terms a little bit in your reference, in all of situations.
Charles J. Merriam: Well, actually, of course in the proceedings in this case where it is controlling the situation and has come in to the Court and take an advantage of its processes --
Felix Frankfurter: Well, how could it come in, who brought him in?
Charles J. Merriam: No, it came in, in the first case before we brought the man. In the first case, was brought only against Peter Eckrich originally. Then when the contract was discovered, the pleadings were amended to include Allbright-Nell Company. The second case, they were named in the very beginning. I -- I make no point of the difference; it's merely a matter of fact.
Felix Frankfurter: Well, did they come in and any -- in any technical venue sense?
Charles J. Merriam: No. They haven't done nothing in the case except to control it and it's our position that does waive a venue but they -- that is the only thing they have done. They did not come in and waive service of process. They have done everything they can to protect themselves if under these circumstances they can protect themselves.
Felix Frankfurter: Suppose you hadn't named them and they had conflict -- they had conference that's able or actively had conducted the litigation, would that have been a waiver?
Charles J. Merriam: Well, under the Ocean Accident case in 143 F.2nd which where that same thing happened, they held that they could name there was a party even after the case was over. We don't have to go that far. In that case, the -- after -- after the proceedings, the insurance company was named as a party, it could not have been served in Ohio and that was a Sixth Circuit case. Our opponent's assert that the statute of Ohio gave jurisdiction outside of the State to serve an Illinois insurance company but the Court found otherwise because it -- it quashed the service of summons on the company but held by having defendant, it was a party and could be so named and proceeded against it.
Felix Frankfurter: The defended meaning that they actually (Inaudible) comfort to charge him a litigation?
Charles J. Merriam: Yes, sir.
Felix Frankfurter: And that's what is called defending a suit for venue purposes.
Charles J. Merriam: For venue purposes, they held that in that case, the --
Felix Frankfurter: In that circuit (Inaudible)
Charles E. Whittaker: Do I understand, Mr. Merriam that after you brought this and it should join Allbright-Nell, some type of process is extended to (Inaudible) the -- it thereafter came in and moved to quash, the court sustained the motion to quash that process?
Charles J. Merriam: That's correct.
Charles E. Whittaker: And thereafter, it moved to dismiss and that case is dismissed, is it correct?
Charles J. Merriam: Yes, sir.
Charles E. Whittaker: Now then, is it your claim that party did thereafter in defending the Peter Eckrich Company under this contract constituted an entry of appearance by the Allbright-Nell Company in the case?
Charles J. Merriam: No, it's our position that what is done theretofore in defending on behalf of Peter Eckrich & Sons constituted a general appearance. The only reason for the service, Mr. Justice Whittaker was that up to that time, we had no way of establishing on the record that Allbright-Nell was in fact there. That is an admission of Peter Eckrich & Sons that the Allbright-Nell Company was present, did not seem to us to be a sufficient basis on the record for so finding. It was only after they were named as a party and did something that there is a basis on the record which would avoid collateral attack. And that is the basis upon which there are quite a number of cases holding that it is not proper to add a finding in the record that so and so was defending the case where he is not named as a party because in another suit where he can say, you found that but I wasn't in fact a party and it's not binding on me.
Charles E. Whittaker: I'm not sure I understand. What if you say what Allbright-Nell had done before it was dismissed of is the subject, matter you rely on?
Charles J. Merriam: Yes, sir.
Charles E. Whittaker: Now, what it had done before was its own defense wasn't it, moving to quash, and then to defend?
Charles J. Merriam: No, there had been other proceedings, Your Honor. There're a number of depositions taken in the case and there had been motions. There -- there are number of depositions taken. I -- I know we had taken some, I think they had -- the Peter Eckrich have taken some. There was a counterclaim filed in the name of Peter Eckrich asking for attorney's fees. Those are the things which we say constituted the waiver not the moving to dismiss nor do we face any claim of jurisdiction on the service in Illinois.
Felix Frankfurter: But were -- were all the -- all the other actions taken in the name of Peter Eckrich?
Charles J. Merriam: Yes, sir.
Felix Frankfurter: Then how -- how do you charge those against Allbright except that they were naturally interested under their agreement and as the whole of the tracking (Inaudible)?
Charles J. Merriam: It is our position that they under their contract were appearing in a situation where they were acting as a party as defined by this Court in Lovejoy against Murray.
Felix Frankfurter: That's the question, whether it was a party.
Charles J. Merriam: Well, in Lovejoy --
Felix Frankfurter: A party is a very technical term, isn't it or a concept?
Charles J. Merriam: The language which I read in --
Felix Frankfurter: I know language, I know -- I mean language but let's analyze this, Mr. Merriam. What -- a party then is somebody who's merely is under a contract that is on this customer, is that it?
Charles J. Merriam: No, a party who is under a contract to do it and does so in the --
Felix Frankfurter: Does so.
Charles J. Merriam: -- in case and acts in such a way as to become bound the result of the litigation.
Felix Frankfurter: Well, it maybe that the consequence over the -- the whole process of a litigation may bind them on -- on that theory to what extent to that runs, but where the threshold here, namely whether the mere fact that he's carrying out his contract of the customer makes him a party and the venue set for the term and Congress has darn good reasons that made these localizing provisions or limitations.
Charles J. Merriam: That is correct. They -- the have a venue privilege with, they may or may not waive. There isn't a question they can waive it.
Felix Frankfurter: I've done my share in favor of getting waiver, Mr. Merriam.
Charles J. Merriam: Yes, Your Honor.
Charles E. Whittaker: Mr. Merriam, would your rule, if I understand it, not make every indemnitor, every liability ensure then a party to -- a direct party to every suit for damages within the coverage of the policy?
Charles J. Merriam: Not unless he did in fact go in and take over the litigation in his own interest.
Charles E. Whittaker: Well, don't they always do that even that the policy so provide.
Charles J. Merriam: I think that the policies normally do so to provide it. I assume that normally, they're carried out and it would certainly cover the ones which did and that's what the Ocean Accident & Guarantee case in the Sixth Circuit did. They -- they held -- they -- the insurance company which defended the case to be a party.
Charles E. Whittaker: Well, your law doesn't allow direct suits against liability insurance, doesn't it, in Illinois?
Charles J. Merriam: Well, I -- that's not my phase of the practice but it's my understanding that you're not -- that you're correct and you're not even allowed, as I understand it, to name the insurance company or to utter any statement about the fact there is an insurance company to the jury.
Charles E. Whittaker: Only one state provides momentarily more like it does and that is Louisiana.
Charles J. Merriam: The situation so far as authority's goal is that there are -- the case below or is against me with the dissenting opinion of Mr. -- of Judge Platt, there is the Ocean Accident case in the Sixth Circuit in my favor. Since the petition was allowed, the case of Dow versus Metlon in 281 F.2nd was decided by the Fourth Circuit and although Dow was my client, I did not know about that case until after it was reported and that case did not consider any of the really relevant law -- earlier authority, it missed even the District Court cases in its own district. It did not cite Ocean Accident and --
William O. Douglas: What is that citation?
Charles J. Merriam: 281 F.2nd 292, Dow Chemical against Metlon. The -- our opponents have relied heavily upon the case of Merriam against Saalfield in 241 U.S. 22 and 28 but that case did not do anything more than decide that there was no res judicata present. What happened there was that a copy right suit was brought in Ohio against Saalfield and after it had been remanded to the District Court or the Court of Appeals before a final judgment was entered an ancillary supplemental proceeding was filed against Ogilvie who was a New York resident and the Court held that, one, that there was no res judicata on -- on the basis that he had defended. The Court held there was no res judicata that would justify joining him and second, that even if there were, which is of course a dictum, this was not the proper kind of an ancillary proceeding (Inaudible). So, that it did not attempt to pass upon the question that we have here either in the decision or in the dictum with which it followed it up.
Earl Warren: Mr. Merriam, do you make any distinction at all between the case of a mere indemnitor such as an insurance company and a -- and a, say, an automobile accident case and this case where it is claimed that -- that the indemnitor himself was a tortfeasor and a proper party in -- in the case had he been in the jurisdiction.
Charles J. Merriam: I haven't tried to, Mr. Chief Justice but I think one might well be done and a distinction might be made. In this case of course, not only is there a charge that which is admitted that the devices here were made by the Allbright-Nell Company, there's also a charge that the -- there was a conspiracy between the Peter Eckrich & Sons and Allbright-Nell Company to have -- to infringe the patent. And while the factual basis of that is not shown here, the charge is made in the complaint and we feel it was justified. I think a -- a distinction might well be made upon that on the ground that the Allbright-Nell Company was not only defending its contractual liability here, but its own right. And it of course, if there is a judgment of patent validity would be bound by it and therefore, it sells to other people. This don't appear in the record but it is in the record if it's in the business of making them and I don't think it's hard to assume their (Inaudible) sales would be in jeopardy. So, that's here not only because of a contact but directly in its own interest for other matters and that might be a ground of distinction although we hadn't felt it necessary to make it in the course of counterclaim which is filed here in that -- in the name of Peter Eckrich asking for recovery which would go only to Allbright-Nell Company, is an additional ground. We also think it's important to preserve as this Court said in the Kerotest case to -- and -- I haven't got the citation, I have only cited in the brief that there should not be more than one case on the same subject and the war should all be fought out in one spot would apply. These people could've intervened under Rule 24 and come here or it has come to Indiana and have the whole war. Instead of that, we have a war going on in the Indiana and another one which has been started on part of the subject matter in Illinois and it seems to us that the -- the whole doctrine of what should fairly be done is best served by holding that a defendant who comes in and takes advantage of the discovery rules should be subject to them at the same time. The Kerotest is 342 U.S. 181.
Felix Frankfurter: Those might be argued, aren't you going to -- if Allbright have the principal people then why don't you go into their jurisdiction and sue them there?
Charles J. Merriam: Well that -- actually, the time this suit was filed, the device was in Indiana that we were suing on, and at that time, it was the only one, but of course now, the -- we could sue Allbright-Nell in Chicago, we couldn't sue the Eckrich Company there who was a party with conspiracy.
Felix Frankfurter: Well, after all by this (Inaudible) sending forth.
Charles J. Merriam: Yes, and this happens or the Eckrich Company has agreed that it will go to Illinois if we ever go there but that should have nothing to do with the rights and we were the ones who selected the forum in the beginning and -- and started there. It does change a number of rights as to witnesses and depositions which they haven't taken.
Felix Frankfurter: And you are suggesting -- what kind of a question is -- and determined by some ultimate principles, a very tricky character.
Charles J. Merriam: Well, sometimes it is and sometimes it isn't, Your Honor. I don't think that the -- the facts in this particular case really should determine what the words should be.
Felix Frankfurter: No, no, I understand that but I mean even the general considerations on an ultimate consideration that you -- the patent venue statute is a particular statute, isn't it?
Charles J. Merriam: Yes, sir.
Felix Frankfurter: With particular provisions deferring from other venue statutes (Inaudible)
Charles J. Merriam: Well, this Court has so held.
Earl Warren: Mr. Rathburn.
M. Hudson Rathburn: May it please the Court. So that I don't forget it, I would like to first refer to the Dow Chemical case in Mr. Merriam's statement. That case did not consider the early authorities that he had just cited. On Page 297 of 281 F.2nd, the Court in the Dow Chemical case cites and paraphrases the Souffront case which Mr. Merriam just mentioned. And they said that the principle of Souffront cannot be extended to satisfy venue requirements and to make one defending an action in the name of another party to the record to settle in (Inaudible). So, the Court in the Dow Chemical case did consider the older authorities. As -- as respondent views this case, we have no question here of statutory interpretation, but that and venue statutes have been interpreted by this Court in Stonite and Fourco and there's no dispute as to the fact that they exclude their -- Section 1400 (b) exclusively governs patent problems and venue cases. And neither is there any question as to whether or not venue or jurisdiction over the person can be waived, either expressly or by a course of conduct. The respondent agrees and concedes that such a waiver can be made. Marble and -- the old case of Marble Metals versus -- versus General Electric say that at 287 U.S. 430 and referred to in the Fourco case, clearly sets forth that venue maybe waived by conduct. The question before the Court is simply this whether or not in a patent case, the course of conduct which is heretofore, been universally considered not to be the waiver should now be so considered. Now petitioners refuse to meet that problem, they don't. They add -- they seem to concede at least in their briefs, I'm not sure what Mr. Merriam's position was during his argument that a manufacture not subject to jurisdiction or venue, they openly conduct the defense of his custom or without waiving its venue provisions if it is not named as a party, but that if it is named as party, the opposite result is reached. I have yet to hear any adequate reason (Voice Overlap) for -- I beg pardon?
Felix Frankfurter: Is that the clear tort distinction that he made?
M. Hudson Rathburn: That's the distinction that he makes.
Charles E. Whittaker: Just naming it as a party --
M. Hudson Rathburn: He -- I think --
Felix Frankfurter: -- although concededly -- although concededly venue precludes bringing it into Court --
M. Hudson Rathburn: That's it.
Felix Frankfurter: -- if it conducts to the effect?
M. Hudson Rathburn: That's correct, Your Honor. But I think he also concedes that if it is not named as a party, it can do exactly the same thing and there won't be any way to bring it in the Court.
Felix Frankfurter: How many -- how many Court of Appeals cases have flatly adjudicated this problem?
M. Hudson Rathburn: There are four that I am familiar with, Your Honor.
Felix Frankfurter: And --
M. Hudson Rathburn: One is the Freeman Sweet case which is cited in our brief.
Felix Frankfurter: What are they (Voice Overlap) --
M. Hudson Rathburn: The Freeman's --
Felix Frankfurter: -- hurry up.
M. Hudson Rathburn: The second one is the Dow Chemical case which is decided in the Fourth Circuit.
Felix Frankfurter: That's this -- this 281?
M. Hudson Rathburn: Yes and there's a case in the Eighth Circuit which is cited at -- which is 25 -- no this, no I'm sorry, Your Honor, 96 F.2nd 979.
Felix Frankfurter: That's the Maine case (Inaudible)
M. Hudson Rathburn: Kresge versus Winget Chemical Kickernick Co.
Hugo L. Black: It's not in your brief?
M. Hudson Rathburn: Yes sir. They're all in our brief.
Hugo L. Black: How do you spell that?
M. Hudson Rathburn: Kresge Company, S. S. Kresge Company versus Winget Kickernick Company at 97 F.2nd 979, that's cited at page 11 of our brief. The Freeman Sweet case is cited at page 10 and the Dow Chemical case at Page 11.
Felix Frankfurter: What's the fourth, that -- that's three as I count it?
M. Hudson Rathburn: The fourth one is this case, Your Honor.
Felix Frankfurter: Oh, I beg your pardon. Now, you started up by saying, the universal practice or -- or was it universal --
M. Hudson Rathburn: It has -- I --
Felix Frankfurter: What -- what I want to know is this? These four Court of Appeals' decisions --
M. Hudson Rathburn: Yes.
Felix Frankfurter: -- which deal precisely -- explicitly with this problem, what is the decision of the four? Are they all to your way?
M. Hudson Rathburn: Yes, sir.
Felix Frankfurter: What about District Courts?
M. Hudson Rathburn: About what?
Felix Frankfurter: District Courts.
M. Hudson Rathburn: District Courts? There are two --
Felix Frankfurter: Of course there and those four --
M. Hudson Rathburn: Yes.
Felix Frankfurter: -- had come up in the District Court, any -- any District Court that didn't go up?
M. Hudson Rathburn: Yes there are two District Court cases in Illinois which petitioners rely on, both of which were appealed but in neither of which was this point raised on appeal and the court below speaking of them said that they could not be considered as adjudicating the point here in issue.
Felix Frankfurter: Now, when you say patent law so patent practice, so why do you depend on what might be called practice.
M. Hudson Rathburn: Yes.
Felix Frankfurter: Are there any other -- any other relevant material except the four decisions? What do they -- what do their reputable right on dealing with this problem there, is there any?
M. Hudson Rathburn: I don't think there has been any comment on it by writers on this particular problem that we have here.
Felix Frankfurter: It calls upon --
M. Hudson Rathburn: And whether you waive venue by this particular conduct.
Felix Frankfurter: How -- how recurrent is this?
M. Hudson Rathburn: Well, the first to these cases that I've cited goes back to 96 F.2nd, Your Honor and those are all the cases that we've been able to find. So it's -- to me, I didn't know the other cases existed. This was a completely novel theory. I had read all the cases that say that by coming in and defending in a patent infringement suit by openly defending, it will become res judicata after final judgment. But this proposition of bringing you in at the start of the case because you have been named and because you were controlling the defense was a completely novel proposition to me until this case came up.
Felix Frankfurter: Well, the -- controlling the defense isn't decisive as you indicate?
M. Hudson Rathburn: It is a res judicata.
Felix Frankfurter: Yes.
M. Hudson Rathburn: Yes.
Felix Frankfurter: But I mean for that -- but it doesn't -- that doesn't take care of the venue problem.
M. Hudson Rathburn: No, it doesn't.
Felix Frankfurter: So that the differentiation is the fact that you're a main defendant.
M. Hudson Rathburn: Yes, sir.
Felix Frankfurter: But of course that is --
M. Hudson Rathburn: That is their position.
Felix Frankfurter: That's the way the law grows by having lawyers take a new (Inaudible)
M. Hudson Rathburn: Yes it is, Your Honor. Now, this gives a rather unusual situation if this rule is adopted because it puts in the hands of the plaintiff complete control over whether or not the same course of conduct will be considered a waiver of the venue statute. If he names you, he said it is. If he doesn't name you, then you haven't waived the venue statute and I don't believe that as I -- seven minute ago, I've -- I've failed to seem the distinction. Now, I'd like to look at some of the results that would follow. If this rule is adopted and the manufacturer is named, there's only -- there are only two choices for a reputable manufacturer. He can appear and defend a foreign jurisdiction and that disposes of the venue statute or he can file a declaratory judgment against the plaintiff in the plaintiff's home jurisdiction and that will probably be a foreign jurisdiction. So the protection that Congress has afforded to people charged with patent infringement is substantially initiated.
Felix Frankfurter: I -- I didn't quite follow, he can get a declaratory judgment in his home?
M. Hudson Rathburn: In the patent owner's home.
Felix Frankfurter: In the patent owner's --
M. Hudson Rathburn: Which maybe foreign to the manufacturer's home forum. So in either case, he has to litigate somewhere other than where Congress said he could be sued. Now, if he's not named, he has another choice. According to this theory of petitioners, he could appear -- not -- not appear, I'm sorry. He could take over the control of the defense but if by an amended complaint he was suddenly named the defendant, he'd have to stop or he'd be in court. Now, I realize that amendments to complaints are within the jurisdiction or the discretionary powers of the District Court and they might not be granted, but I don't Congress intends to leave venue questions up to the discretion of the District Court.
Felix Frankfurter: What do you say to the -- well, I'm interrupting?
M. Hudson Rathburn: If -- no.
Felix Frankfurter: You go on ahead. You -- is there other instance?
M. Hudson Rathburn: No, I -- I think that petitioner's arguments on the other side are -- are largely words. They say Allbright-Nell is actually present in court. That doesn't mean anything. Allbright-Nell has not been represented in that courtroom except in connection with its motion to dismiss. We, as attorneys for Peter Eckrich have no authority to act for Allbright-Nell in that case or put Allbright-Nell in the case. They say that Allbright-Nell can take full advantage of the judicial processes of the District Court. Again, that doesn't mean anything. We had -- Allbright-Nell has no rights in that Court. In fact, it's been dismissed out of the Court. All it's doing is assisting Peter Eckrich in protecting its rights and there's no affirmative relief being sought for Allbright-Nell. Mr. Merriam once referred to the Peter Eckrich counterclaim for costs and attorney's fees but those are not sought in behalf of Allbright-Nell and they couldn't be awarded to Allbright-Nell in this case. Only after the trial can it be determined whether any or all of these expenses were paid by Allbright-Nell or Peter Eckrich and Peter Eckrich certainly cannot be awarded costs for any of the expenses that Allbright-Nell paid. It's my understanding in the few cost matters I've had that you have to make a showing that the items you asked for as costs have actually been expended by the person asking for the costs. Certainly, the fact that Peter Eckrich has asked for costs is not a submission to jurisdiction by Allbright-Nell. Now --
Felix Frankfurter: Either the --
M. Hudson Rathburn: -- this question -- excuse me.
Felix Frankfurter: Do you agree that if this litigation on the merits had gone against Eckrich, it would've found Allbright?
M. Hudson Rathburn: Absolutely.
Felix Frankfurter: Well, then one naturally ask this question which I take it was rather the -- who makes that, Mr. Merriam's argument, namely if a non-technical party is so involved in the litigation into which he could not have been subject and in which -- into which he could not have been drawn and into which he is not a formal party, yet he is so involved and related with it, inexplicably tied up with it that the judgment is foreclosed against him, why withdraw practical purposes before the Court.
M. Hudson Rathburn: Because if res judicata is the only problem he has, there will have to be a new suit brought against him in his home jurisdiction where he is present and where an accounting will have to be held. That is the one of the disadvantages of being, as you say, pulled into a foreign jurisdiction. The other one is discovery proceedings. Now, as a practical matter in this case, I don't think the plaintiffs have been deprived of any discovery. Allbright-Nell witnesses have testified voluntarily and they've been called, but there are hardships that can be inflicted on a corporation if it is sued in a foreign jurisdiction so far as taking depositions of its officers. If their notice for deposition and the place where the sued is filed, they have to go in and get a protective order. Some judges won't give it to you. Some judges will say, "The suit is here, you're a party, you have to be here." Those are the only practical differences. I think the difference is largely a matter of principle that we‘re concern with here is to whether or not by this sort of conduct, a patent owner can practically avoid the venue statute simply by running around and filing suits against costumers who own maybe one or two machines when they know about the manufacturer, they can sue the manufacturer. In this case, both the plaintiff and Allbright-Nell, I should call the residence and the -- the principle attorneys from both companies are in Chicago and I think Mr. Merriam didn't quite state the whole case when he was asked about suing in Fort Wayne. The -- the machine that they charged to infringe was in Fort Wayne but it had been manufactured in Chicago and it had been manufactured not obviously before it was sent to Fort Wayne for use. So, the infringing act that -- that Allbright-Nell could've been charged with was completed and it was done in Chicago. This is simply a question of they're having, for some reason that I haven't been able to find out, preferred to sue in Fort Wayne and having made that choice I don't think that they should be permitted to draw the manufacturer in. It happens that Fort Wayne and Chicago or not very far apart in this case but it could as well have been Florida and I've been in cases where that happened and where I resisted successfully exactly this thing but in the District Court. This case --
Felix Frankfurter: I quite --
M. Hudson Rathburn: I beg your pardon.
Felix Frankfurter: I beg pardon your. I quite agree with you that the whole question is whether you have in any two sense waive of you?
M. Hudson Rathburn: Yes.
Felix Frankfurter: But what's still -- I'd like to get enlightment indictment on is why if Allbright are so committed to this litigation on purposely using different words, if they're so committed to this litigation by their conduct in it but a human practical conduct in it that the fate of their interest is depending on the outcome of this litigation, that's what I'm asking, am I not?
M. Hudson Rathburn: Yes. Well, the Constitution --
Felix Frankfurter: Why if that is so, why isn't such commitment, such -- such dependence of their interest of safeguarding of their interest in this litigation to which they're not a party, so intrinsically joining up with an entering into a -- a relationship to, that that's the best use of the term to the litigation that one case say they waive the right to abstain from being so involved.
M. Hudson Rathburn: Because Your Honor, they have preserved the right not to be made a formal party so that they can't get out. Allbright-Nell can drop the defense of this suit tomorrow if question -- if circumstances change. They're -- they may cancel their indemnity agreement with Peter Eckrich for example. They may decide that they want to change their structure and that this case isn't worth defending involving only the one machine that Peter Eckrich makes.
Felix Frankfurter: Well, they may --
M. Hudson Rathburn: They are flexible as long as --
Felix Frankfurter: They may think this isn't a good case on which to go up if this was against him.
M. Hudson Rathburn: That -- that is correct. And as long as they are not made a formal party, as long as it is not held that they have waived, they are free to do that. Once there's been a waiver they can't withdraw from it. Now, there are some other problems that arise and they ought to be considered I believe and that is whether or not what effect this would have on the general practice of giving indemnity agreements. I think it can be said that it is the general practice of most manufacturers to defend their customers and that in these agreements, the manufacturer usually assumes -- who assumes the financial risk, insist on the right to control of defense. Now, first, I think it can't be again said that patent indemnity agreements are socially desirable. They ensure retailer or an end user of a manufacturer's products that he won't be subject to a claim for damages and he won't be deprived to his use of the product. Let's say, serve to protect a group which are individually weak and who generally can't -- could not afford the expense of conducting a full-fledged defense of a patent infringement suit. Now, they're also desirable because they make it difficult for a patent owner who has a weak patent to assert it against weak defendants because generally, the manufacturer is the one and the only one who can vigorously resist an uncounted -- founded claim of patent. As we have previously indicated, the -- that the manufacturer's only recourse would be the two choices that I said, declaratory judgment or no indemnity agreement. And while this might not be anything more than inconvenience to a large manufacturer, it could be disastrous to a small manufacture if he has only the choice of defending himself for pursuing a declaratory judgment suit in a -- in a forum far removed from his home base. Now, I'd like to look well briefly, this waiver rule that petitioner urges, would probably result in manufacturer's failing to indemnify others and that -- and if that were so, if that notice would be able to select favorable forums and by a series of suits against weak resistance or non-resistance build up a situation where that would greatly strengthen the prima facie validity of their patent and that it would be adjudicated in a weakly defendant suit and each time that happens it gets strong in the next suit. Now, third, I think we should look at what advantages the patent owners get if this rule is adopted. First, it gives them a virtually unlimited choice of jurisdictions in which they can force a manufacturer to defend the patent infringement action. And it was to avoid just exactly this situation that the venue statutes in patent cases, the present statute and its predecessors were adopted. In the Stonite case, in --
Hugo L. Black: In which case?
M. Hudson Rathburn: Stonite, 315 U.S., decided in our brief at Page 566. This Court commented on the fact that that was the exact purpose of the special patent statute to limit jurisdictions and which patent infringement actions could be brought. The second patent owner would have a somewhat improved position as far as pretrial discovery is concerned, but they can get that by suing the manufacturer in his own jurisdiction. Under the venue statutes, a patent owner can balance the advantage of suing a customer against advantages of obtaining full pretrial discovery against a manufacturer. I don't think he should be given both choices. He can pick the customer where he wants to litigate and either preclude the manufacturer from defending or bring him in as a formal party to the litigation. So far as I've been able to find, this exact case has never -- this exact situation has never been faced by this Court in a patent case. However, I view the Merriam v. Saalfield case somewhat differently than petitioner does. That was a case involving unfair competition. After the -- if the case was openly defended by the owner of the copyrighted materials that were involved and this is what the Court said after the judgment against the named defendant, a supplemental bill was filed naming the person who had openly defended, a man named Ogilvie. And the Court said, "Appellant's case on the merits is rested upon the theory that Ogilvie was privy to the original suit against Saalfield and an actual who not an ostensible party thereto." In such a real sense that the final decree there would -- in -- would be res judicata against him. That the District Court had jurisdiction to entertain a suit as against him notwithstanding he resided outside the district because by voluntarily coming in and defending for Saalfield, he had submitted to the jurisdiction and waived the objection. Now, that is the argument that was made in the Saalfield case and this Court said, "This sufficiently shows the weakness of appellant's position which upon analysis is found to be this, that upon the theory that Ogilvie will be estopped by a final decree if and when may it sought to bring him into suit before a final decree as if he were really estopped. However, convenient this might be to a complainant in appellant's position, it is inconsistent with elementary principles" and they refused to bring Oglivie into the case as a party under the supplemental bill. Now, the Ocean Accident case which did permit the Court and in which the Court did compel the defending insurance company to come in is in many ways distinguishable. In that case, they did not bring, attempt to bring them in until after judgment. Also, under the Ohio laws, insurance company was directly liable to the plaintiffs, once the judgment had been obtained against the insured and I think that those are two distinguishing facts that should be considered. I feel this way, that if the Ocean Accident case stands for what petitioner says, I am in complete agreement with the court below that that course should not be followed because while it might be socially desirable in insurance company cases to avoid the cost of the separate suit against the insurance company, I can see no social desirability invoking that rule in patent cases. I believe I've already referred to the fact that both petitioner and respondent are residents of Chicago and that I have -- unable to find no explanation as to why the suit is not in Chicago. If it had been brought in Chicago, we wouldn't be here. I'd like to refer closing to the language this Court used in the Olberding case which is cited at Page 17 of respondent's brief. The case is reported at 346 U.S. 380 -- 338 and the Court said, "The requirement of venue is specific and unambiguous. It is not one of those vague principles which in the interest of some overriding policy is to be given a liberal construction." While we're not concerned with a direct construction here of the venue statutes, I think we are concerned with the problem which would in effect broaden the venue statutes and I sincerely feel that the decision of the Court of Appeals in this case should be affirmed. Thank you.
Earl Warren: Mr. Merriam.
Charles J. Merriam: Mr. Rathburn in stating that the plaintiffs were residents of Chicago has overlooked the fact that Mr. Schnell who is one of the petitioners is a German resident who lives in near Stuttgart, Germany. I don't place any reliance on that but that is correct.
Earl Warren: What was that, I didn't get that?
Charles J. Merriam: The petitioner Carl Schnell is a German resident, a national living near Stuttgart, Germany not in Chicago.
Felix Frankfurter: You can't get him anyhow, even in Indiana or in Chicago?
Charles J. Merriam: Well, as a plaintiff he could go to either place.
Felix Frankfurter: He could incidentally.
Charles J. Merriam: The Winget case which Mr. Rathburn has referred to was one in which the defending corporation was not named as a party and that appears from the opinion itself. In the Freeman case, also, it's our position they were not named as a party until after the trial was over when they merely asked to add them as a party to the pleadings. And while Mr. Rathburn has said, I haven't made clear my distinction between the case where they are named a party and where they're not, I'll -- if I have made it clear, I'll say it again. I don't think in justice, there's any real reason for a distinction but if the man is not -- the corporation is not named as a party, then there is no pleading to support a judgment against him. And it seems to me that the pleadings must show that he is there and there'd be something of record to show that he is there other than a mere finding and that is held in plenty of these cases that it would be subject to collateral attack merely to make a finding against one not a party that he is a party. And that's why I have made the distinction in my argument for Freeman. I think in justice that and of course the courts hold that it doesn't make any difference as to being bound. You're bound whether you're named or not. The two facts that we have to bother as here of whether or not or one party is in the case taking full advantage of the Court's time and its procedures, it should not be bound by those same procedures and whether it should not be bound to -- not to start another suit while this one is going on.
Felix Frankfurter: Mr. Merriam, before you sit down, I wondered if you'd say a word more about the Merriam case. I quite agree that the case isn't a decision, what do you say to Justice Pickering's course of argument?
Charles J. Merriam: Well, his -- his argument, as I read it was that the petitioner or the plaintiff had put his ground on the basis that there was res judicata and he said this is not a proper argument that there is no res judicata.
Felix Frankfurter: Yes, but there -- why do you -- a great deal of your argument unless I am doing injustice to it, a great deal or -- or forcible part of your argument is that in as much as res judicata would operate against Allbright, it's little unreal is that the face the actualities of life to say that they're not before the Court. Am I doing injustice to your argument?
Charles J. Merriam: I think not, but there is this difference.
Felix Frankfurter: Now, if that is so and Justice Pickering says, "There are good reasons for -- for having res judicata applied, the litigation comes to an end." then they'll all looks at the reality who says, was really you've -- you've been the mainstay. You've been -- you've have been laboring order, at least you took it to get this result and therefore, you're welcome to say that -- that you aren't really before the Court and you really were, but merely by sitting in and conducting a litigation, you don't make yourself a party. I'm not -- I think that it's not an unfair summary of what Justice Pickering's line of argument was?
Charles J. Merriam: Well, I think that this -- there is this distinction Your Honor. In the -- or Merriam-Saalfield case, the naming of the party was not done in the original case, it was done by a supplemental bill and the argument was made if they had a right to file a supplemental bill as an insularly proceeding on the ground that there was res judicata. There was a good deal of dispute is to whether Ogilvie was still in the case. He -- that was disputed but -- and the Court passed it off on the ground we first -- we find there isn't res jusdicata which you allege and second, this isn't an insularly proceeding --
Felix Frankfurter: Well, are we --
Charles J. Merriam: The -- the argument which I am making was not made there whether it could've been or not, I would say that under the situation where it was a supplemental bill, they couldn't have made the argument. At any rate they didn't and the Court didn't answer it and I don't think it would've been applicable under those circumstances.
Felix Frankfurter: All I'm suggesting is that it would be a still nice requirement to -- to suggest to the Court that that if you originally joined a non-coercible party, as a party, then you're before the Court if you really defend. But if you don't originally join but later asked the Court to amend the complaint, you know that's a little bit -- been in -- then you get a little too tied, isn't it?
Charles J. Merriam: I think not.
Felix Frankfurter: And that there hasn't been and as to as if you Ogilvie and Meyer. Certainly today, anybody would grant after that, I would say that but certainly, with the present day of liberality about the amendment adding parties, was asking, it could be used or this Court make a distinction between originally having joined a non-coercible defendant and having him brought in later.
Charles J. Merriam: Well, I think a defendant has a choice once he is named as a party, they know what he's going to do from that time on and it's important in that -- in that phase of it. I also believed --
Felix Frankfurter: And we had the plain choice on -- on Ogilvie and Merriam and they neither he could've come in without -- if nobody would've objected, he would've been in.
Charles J. Merriam: Well, he said, I'm not in anymore when it came to the supplemental bill and that's one of the reasons he want to get out but didn't pass on that and he said it was too late. But here, there are two reasons, one is that the defendant has a choice and the other is that the Court can't enter a proper order unless he is named because it would be subject to collateral attack.


Warren E. Burger: We will hear arguments next in Andrus, the Secretary of Interior against Charlestone Stone Products. Mrs. Beale, I think you may proceed.
Sara Sun Beale: Mr. Chief Justice and may it please the court. This case comes before the court on the government’s petition for review of a decision of the Court of Appeals.
Warren E. Burger: Mrs. Beale, may I suggest you draw the microphone a little closer to you. Thank you.
Sara Sun Beale: Seeking review of a decision of the Court of Appeals for the Ninth Circuit, holding that water is a mineral subject to location under the federal mining laws. To put it in another way, the Court of Appeals held that the rights to water on the public domain are mineral rights which should be acquired pursuant to the federal mining laws. Since 1866, the federal mining laws have permitted citizens to discover and extract valuable mineral deposits on the public domain and to secure fee title to lands containing such discoveries. A claimant must establish that he has discovered a valuable mineral deposit within the limits of each claim. To show the value of such a discovery, the claimant must establish that a person of ordinary prudence would be justified in the expenditure of both time and money with the reasonable expectation that minerals from such a claim could be marketed at a profit. At the outset, none of the parties in this case viewed it as a water law case. The disputed issue was, rather, whether the respondent could show a valuable and marketable discovery of sand and gravel. In 1942, respondent’s predecessor in interest had located more than 20 plaster mining claims in a narrow wash on public lands about 15 miles Northwest of Las Vegas, Nevada. In the aggregate these claims, and several others located a few years later, cover about 500 acres of land and they encompass a massive deposit of an estimated 20 million cubic-yards of sand and gravel. Until 1955 sand and gravel were subject to the federal mining laws. But, in that year, Congress withdrew common variety minerals including sand and gravel from location under the mining laws. The Secretary of Interior initiated administrative proceedings in 1965 contending that each of respondent’s 25 sand and gravel claims were invalid for want of discovery of a valuable mineral prior to this 1955 withdrawal date. A hearing was conducted at which the Secretary presented the testimony of a mining engineer who stated that the excessive distance from these claims to the market in Las Vegas and the lack of water to wash the material prevented profitable marketing of this sand and gravel prior to the withdrawal date in 1955. It is undisputed that water was first discovered on these claims in 1962, when respondent drilled a successful well on claim 22. The presence or absence of water was important here because washing sand and gravel greatly increases its marketability. The Interior Board of Land Appeals credited the testimony of the government’s expert witness and concluded that respondent had established a valuable discovery of sand and gravel on only one of the 25 claims, the one from which sizable deposits had actually been removed prior to 1955.
Speaker: Mrs. Beale, would you help me out of my ignorance. A plaster mine is a mine which involves the use of water, is it not?
Sara Sun Beale: In most cases, I believe it does. The difference between a load and a plaster claim, as I understand it, a load claim is one where there is a vein of the mineral running through so that often one can come with a pick or whatever to get at that mineral, whereas, the plaster claims usually involve a mineral more broadly dispersed throughout the geographic limits of the claim. So very often in the case of, say, a gold-plaster claim, one would use water to wash out the other materials and get at the valuable mineral.
Speaker: But a plaster mine does not inevitably involve the use of water?
Sara Sun Beale: I do not believe so. In the case of sand and gravel plaster claim, it is used to only wash the water. But in this case the respondent --
Speaker: It is not absolutely necessary.
Sara Sun Beale: Right. Respondent sought review of this decision in the District Court which satisfied the administrative decision as arbitrary, capricious, and not supported by the evidence. The Court held that the Interior Board had erred in crediting the testimony of the government’s expert witness, found credible the respondent’s evidence on the issue of marketability and it concluded that at least the claims numbered 1 through 16 had been proved valid. Moreover, it concluded that the respondent should be permitted access to claim 22 in order to make use of the water produced by the well. The District Court did not offer any legal basis for offering access to the water on claim 22. The Court of Appeals affirmed the decision of the District Court with one significant addition. It held that claim 22, itself, was also valid because the water that respondent had discovered on that claim was itself a locatable mineral under the mining laws. The parties had neither briefed nor argued this issue. The court, however, looked to the mining laws and found that there was no provision that expressly defined water as a non-mineral. The court stressed the fact that the recovery procedures used in the case of many hard minerals required the use of water. Therefore, it found that it should not assume that Congress had been unaware of what the Court called the necessary glove of water for the hand of mining, and it had made no provision for the necessary acquisition of water rights for the operation of such claims. Accordingly, it concluded that Congress must have intended that water itself, should be locatable as a mineral. In the case of claim 22, the Court held that the evidence established the discovery of a valuable mineral, first, because water has an intrinsic value in a dessert area. Moreover, because respondent’s use of the water to wash the sand and gravel thereby increasing the value of the sand and gravel, show that there was a profitable market for the water and that it was a valuable mineral deposit. The government submits that the Court of Appeals conclusion that water is a locatable mineral disregards the intent of Congress.
Speaker: That is the only question you brought here, is it not?
Sara Sun Beale: That is correct. In our petition, we note that there are other respects in which we believe the Court of Appeals had erred, but we did not raise those in this case. We believe that the decision disregards the intent of Congress as expressed in the mining laws themselves that the acquisition of private water rights on the public domain should be governed by state and local laws and, therefore, not by the federal mining laws. The Court’s decision, in our view, also disregards the precedence of both this Court and of the longstanding administrative interpretation of the Department of Interior. The premise of the Court of Appeals’ opinion is that Congress did not expressly define water as a non-mineral and that it made no expressed provision for the acquisition of water rights necessary to work mineral claims.
Speaker: Do you think the 1955 legislation has anything to do with the issue in this case?
Sara Sun Beale: The 1955 legislation to which I believe you are referring to is the one which withdrew the common variety minerals.
Speaker: The common variety minerals.
Sara Sun Beale: Right.
Lewis F. Powell, Jr.: Such as sand and gravel.
Sara Sun Beale: It specifies the minerals sand, gravel, pumice I believe, fossilized bones.
Speaker: It specifies all. I could not find the --
Sara Sun Beale: That is correct.
Speaker: I could not find the language of the legislation in the papers here, but it specifies every one of them.
Sara Sun Beale: It specifies the minerals and I believe in both our petition and in our brief that there is a provision in the 1955 legislation indicating that there was no intent to interfere with State Water Law. We think that that buttresses not only our conclusion that the mining laws do not affect water laws, but should water be held to be a locatable mineral, would make it impossible to somehow construe, in my view, the provision of removal of common varieties as applicable to water. The premise of the Court of Appeals’ opinion was that since there was no expressed provision for the acquisition of water rights that are necessary to work many mineral claims. The court thought that Congress must have intended to provide some mechanism so that miners could acquire these rights. Therefore, it must have intended the only provision which the Court sought hand, the mineral laws themselves, to apply to the acquisition of water rights. The premise for this reasoning is false. The general mining law, since their inception in 1866, have provided separately for the right to mine valuable minerals on the one hand, and for the acquisition of water rights on the other hand. Congress did recognize from the outset the critical role that water played in mining operations. But, instead of establishing a federal statutory system to govern the acquisition of private water rights on public lands as it set up a system for the right to acquire minerals. Instead, Congress chose to ratify the rights that were recognized under the state and the local laws that were developing in the erred regions to allocate water among the competing uses including mining. Both the general mining laws enacted in 1866 and in 1870 contained separate provisions regarding water rights. These provisions were left unchanged when Congress enacted the 1872 Mining Law, and they are now codified as Sections 51 and 52 of Title 30. They are reprinted in page two of the government’s brief. Section 51, which was part of the Mining Law of 1866, provides that rights acquired by priority of possession to the use of water on public lands, rights that are recognized and acknowledged by local customs, laws, and decisions of the courts should be maintained and protected. Then, in 1870, Congress enacted what is now Section 52 which provides additionally that any patents granted or homesteads allowed are subject to vested and accrued water rights acquired or recognized under Section 51. Congress thus expressly provided in the mining laws themselves that the acquisition of private water rights on the public domain is governed by state and local law, not by the federal mining laws. Other public land laws, particularly the Dessert Land Act of 1877, advents the same intent to sanction water rights acquired in accord with state law rather than to establish a new and separate system of federal law.
William H. Rehnquist: That was our holding in Beaver Portland Cement, was it not?
Sara Sun Beale: That is precisely the very next thing I was going to say. This court has recognized that intent. In particular, in California Oregon Power Company versus Beaver Portland Cement, the Court said as follows about these two provisions. the Court said that “provisions of the 1866 and 1870 mining laws" approve and confirm the policy of appropriation for beneficial use as recognized by local rules and customs under legislation and the judicial decisions of the erred land states as the test and the measure of public rights in and to the non-navigable waters on the public domain. The inclusion in the mining laws of these specific provisions for the acquisition of water rights precludes any inference that Congress intended the federal law of mining claims to govern the acquisition of water rights. The Court of Appeals, however, was apparently unaware of these provisions and of the decisions of this court construing them. Contrary then to the Court of Appeals’ belief that it would be advancing the purposes of the mining laws. Instead, its interpretation of the mining laws would defeat what this Court has recognized as Congress’ clear intent that the acquisition of such rights should be governed by the state and local laws. Congress was well-aware that the Western states were gradually developing a system of water laws that was especially suited for the needs of that erred region. Congress obviously intended that private water rights on the public domain would be acquired in accordance with this specially suitable system. We believe, therefore, that a reading of the mining laws as a whole leaves no doubt as to Congress’ intent to treat water rights a separate and distinct from the right to mine valuable minerals. But even if these provisions were unclear, any possible doubt on the score has long since been removed by the administrative decisions of the Department of the Interior which is charged with regulating the acquisition of rights in the public lands.
Speaker: Mrs. Beale, do you think your position here is fully consistent with the position of the United States as taken before, say, in the original number 8 where it involves a reclamation service dam in California? The question is whether or not the United States, to get its water rights, must comply with state law.
Sara Sun Beale: I think that the position here is completely consistent. The question of whether federal water rights --
Speaker: Do you mean the congressional acts up to date should not be understood to bind the United States?
Sara Sun Beale: No, I do not think that.
Byron R. White: Or the reclamation service?
Sara Sun Beale: I do not mean to draw that distinction. What I mean to say is that, in the mining laws and in the Dessert Land Act, Congress was speaking to the acquisition of private rights, the rights of homesteaders, the rights of individuals.
Speaker: Why was it not speaking to how the United States should get its rights?
Sara Sun Beale: As this court recognized in the California Oregon Power Co. case, the United States initially had in the public land states, the ownership rights of not only the land but the waters. In the California Oregon Power Co. case, this court said that it viewed the intent of Congress as intending to give out land patents on the one hand under one system, under the mining laws, under the agricultural entry laws, under the Dessert Land Act, and also to provide a way whereby private rights to waters on the public domain could be acquired. That seems to me to be a different question from what happens when the federal government needs to use certain water rights. If they had not been given out to private individuals, then the questions are entirely different, I would think.
Speaker: In any event, as I understand your argument, however this case is decided, it has no relevant impact upon that other litigation.
Sara Sun Beale: I believe that is correct, yes.
William H. Rehnquist: Certainly a private claimant, for example, would have no claim for water under the implied Reservation Doctrine, although that was not relied upon by the government in the original number 8 but, that is certainly an example of a way a governmental right might be different from a private right.
Sara Sun Beale: It certainly is and I think the Reservation Doctrine is based upon the notion that Congress had those water rights at the time that it set aside land for a certain purpose. Congress had those water rights. No private party is in the same position. It is a question of interpreting the intent of Congress in the mining laws as to how private rights would be acquired, which is really quite separate from the reservation.
Speaker: Why is it not arguable though that by granting mining claims that the United States impliedly grants water right or reserves them for that purpose?
Sara Sun Beale: If Congress had not expressly provided in the mining laws that water rights acquired under state and local law should be acquired under state and local law and would be recognized by the federal government and if Congress had not in other statute, such as the Dessert Land Act, indicated that there was this division, that might have been a possible interpretation. If this Court were to view the provisions as ambiguous however, the decisions of the Department of Interior beginning in the 1880s, shortly after the adaption of the mining law of 1872, resolved any doubt that department held unambiguously that water claims could not be patented under the mining law but must be acquired instead under state law. To the extent that the Court might find the statutes unambiguous, that doubt has long since been resolved by the consistent interpretation of the department charged with administering the public land laws. That view of the statutes was reaffirmed as recently as 1976, in a comprehensive decision which we have reprinted in our petition for certiorari. We believe that, given the fact that this longstanding interpretation has prevailed for a century and has been the basis for a set old system of property rights, it should be virtually conclusive at this point. The recent decision on the Interior Board of Land Appeals on this point, to which I refer, convincingly demonstrates the soundness of that department’s view. They relied not only upon the theory of this court in the California Oregon Power Co. case, which looked to the structure of the mining laws themselves and the fact that Congress had provided on the one hand for the acquisition of water rights and on the other hand, for the acquisition for the right to mine valuable minerals. But, the Board also took a very common sense view of Congress’ intent in using the term “mineral. It recognized that if Congress had intended the mining laws and the use of the term “mineral” to be given the broadest possible definition of the term such that when one speaks of the division of all matter into animal, vegetable, and mineral and intended that all matter that could be classified as mineral in that sense to be locatable under the mining laws, then all the public lands will be mineral lands. If this were so, there would have been no need for separate provisions in the many public land laws dealing with non-mineral lands permitting agricultural entry and so forth. Congress clearly, as the Interior Board recognized, could not have intended the term “mineral” to be given such a broad definition which would make nonsense of the mining laws and of so many of the other public land laws. The Board also noted, and this is an important consideration, that the location of water as a mineral would invite the widespread abuse of the mining laws by persons who were seeking public lands for other purposes who would attempt to take advantage of a widespread occurrence of water and the relative ease with which mining claims may be patented.
William H. Rehnquist: Is that not one reason why Congress acted the way it did in 1955, to eliminate sand and gravel pans as if people were really getting the pans not for the valuable sand and gravel, but because they wanted the acreage?
Sara Sun Beale: That is precisely correct. The Legislative History of that provision indicates clearly that the location of sand and gravel claims were being misused and that it was being used to acquire land for residential purposes and all sorts of purposes not comprehended in the mining laws. The Interior Board of Land Appeals concluded that the very same abuses would be invited if water, itself, which is of such common occurrence, could be located under the mining laws. It is relatively easy to acquire a mining claim. It would invite abuse for that reason. We have no figures available that would tell precisely how many acres of public lands might contain water which could be discovered, but it seems relatively clear that millions of acres of public land would be affected. We believe that setting aside the long-established administrative and judicial construction of the mining laws would throw established rights into question and would, therefore, completely unsettle the law of water rights throughout the Western states. The Court of Appeals’ decision, because it does not acknowledge the existence of the water rights provisions adapted as part of the mining laws, does not give a hint whether that court’s opinion should be viewed as holding that the location of mineral claims to water rights is the exclusive method by which private water rights on the public domain could be obtained. Perhaps it might have intended that there was to be an alternative method to state law. But, if that decision were interpreted as holding that the only way that one could acquire water rights on the public domain is under the mineral mining laws, then private rights long since considered throughout the West would presumably be invalidated. The respondent seeks to avoid this obviously undesirable result and to interpret the Court of Appeals’ decision somewhat more narrowly arguing that the mining law should be viewed as merely an alternative to state procedures. However, respondent offers no evidence that congress actually intended to create such an imaginable dual system. Harmonizing the rights acquired under the two systems would be a difficult task and one would surely generate extensive litigation. Moreover, the mining laws were never designed to allocate water rights and we believe they are ill-suited to this task. Respondent has failed to suggest any reason why this Court should reverse all prior judicial and administrative interpretations of the mining laws to reach such a result. We believe that the administrative interpretation of the mining claims, the decisions of this court, and an examination of the structure of the mining laws themselves, each compels a conclusion that Congress did not, in fact, intend water rights on the public domain to be located under the federal mining laws. But, rather, that it intended that such rights would be acquired pursuant to state and local law. We, therefore, respectfully submit that the decision of the Court of Appeals should be reversed in so far that it holds that the water on claim 22 was subject to location under the mining laws.
Warren E. Burger: Mr. Levenberg.
Gerry Levenberg: Mr. Chief Justice and may it please the court. In our view, the government makes too much of Sections 9 and 17 of the 1866 and 1870 provisions of the mining laws.
William H. Rehnquist: But did this Court not make quite a bit of them in the Beaver Portland Cement case, written by Justice Sutherland who is, himself, regarded as an expert on Western Water Law?
Gerry Levenberg: Your Honor, he certainly was so regarded. He discussed those provisions at some length in the opinion as we acknowledged in our brief. But, I think that a fair reading of that decision suggests that the Court did not, in fact, hold that the sole means by which water rights could be obtained, under the mining laws were by appropriation under the state laws.
William H. Rehnquist: Do you think it is unfair to say that most Western lawyers involved in water law have read that decision to mean that those two Acts savored the water from the land and left the water to acquisition by state law?
Gerry Levenberg: I do not think that is unfair to say either, Your Honor.
William H. Rehnquist: But do you now say that perhaps those lawyers were wrong in reading the decision that was.
Gerry Levenberg: What we try to say is that, as we set forth in the brief especially at pages 16 through 18, that what was involved in Beaver Portland were not claims under the mining laws of 1866, 1870, or 1872. There were two separate claims to water by two private parties, one under the Homestead Act of 1862 and the other under the Oregon State Water Code. The court concluded and held in that case, the provision of the Dessert Land Act meant. It did not hold, we submit, that the only means by which water could be obtained under the mining laws was by state’s appropriation.
William H. Rehnquist: But, if the Dessert Land Act savored the water from the land, did that not mean that no further water could be acquired in the same way that you acquire other mineral patents?
Gerry Levenberg: In so far as Dessert Land Act entries, Homestead Act entries, Preemption Act entries were concerned, that is precisely what Justice Sutherland said. He was a man who, as you pointed out, wrote quite carefully.
William H. Rehnquist: He is from your home state.
Gerry Levenberg: There is no indication anywhere in Justice Sutherland’s opinion and the government points to none which states specifically that with respect to claims under the mining laws, and that is what is involved here, with respect to those claims the sole means by which water may be obtained is under state appropriation. There was no edict from this court, if you please, which said “henceforth, mining act patents shall savor land from water.
William H. Rehnquist: Are you troubled at all by the Ninth Circuit’s failure to refer at all to the Beaver Portland Cement case in its opinion in this case?
Gerry Levenberg: Obviously, Your honor, we would have preferred for the Ninth Circuit to spell out in greater detail the basis for its holding. We do wish to make it very clear that we are not contending, as the government appears to attribute to us, that with respect to vested water rights, pursuant to Section 9 of the 1866 Act and Section 17 of the 1870 Act, that rights which have already vested and rights which vest tomorrow should not be protected. That is not our position. Our position, very simply, is that the plain language of the Act of 1872, which states that all valuable minerals maybe discovered, is what Congress meant to say and in the absence of a withdrawal by Congress, as you pointed out and as the government points out and it did in 1955 when it removed certain common variety minerals, in the absence of a withdrawal from the broad provisions of the 1872 Act of specified minerals that that general grant of authority prevails. Our position is that with respect to rights that have already vested, and that is the language of Section 9 and that is the language of Section 17, rights which have vested and accrued. Those rights remain vested and accrued, and nothing that this Court could decide in this case by affirming the lower court’s opinion would derogate from those vested rights. The government argues that it would leave an unmanageable system. The government does not explain why the system is any more manageable today in circumstances where a state appropriation with respect to a given portion of water that runs during particular times of the year or particular specified flow and relieves to be claimed what is left of that residual of rights under state law is any more manageable.
William H. Rehnquist: The two tests are quite different though, are they not? If you are talking about how you acquire a mineral claim, it is a prudent man thinking that there is valuable mineral in place on the claim.
Gerry Levenberg: Correct.
William H. Rehnquist: On your water claim, under most western state appropriative systems, it does not depend upon value. It depends upon prior and beneficial use.
Gerry Levenberg: Yes, Your honor, that is absolutely correct. Our point is, again, in response to the parade of horribles that the federal government sets forth in this case that would prevail if we prevail. The answer to that is, in our view, that the very requirement that a demonstration be made that the mineral is valuable, the very requirement of the prudent man test, the very requirement of the marketability test is sufficient to insulate claims that would lead to abuse. We have no quarrel with the proposition that, of course, the tests are different under a state appropriation and under the mining laws of 1872. But that does not, in our view, lead inexorably to the conclusion as the government would have it that when Congress said in 1866 and in 1870 that “we will respect those water rights that have vested and accrued under state law,” that it was saying that that was the only manner in which water rights could be obtained. We do not believe there is support for that. We do not think that Mr. Justice Sutherland and this court decided that issue in the Beaver Portland case. The argument that the government makes about the longstanding interpretation of the interior department does not take into account that, as this court has made clear, while construction of legislation by departments charged with administering the legislation is indeed entitled the deference. This court is not, thereby, permitted to abdicate its function of reviewing the wisdom and correctness of that interpretation. In particular, I cite the court to a decision, an opinion by Justice Harlan in Zuber v. Allen, 396US 109 at 328. The abuse argument that is relied upon so heavily by the government, seems to me, was indeed answered, Mr. Justice Rehnquist, by what Congress did in the 1955 Act. When it was confronted with circumstances which demonstrated that abuses of the mining law had been taken place, the Congress responded and it did so on the basis of evidence before it, not on the basis of allegations about the horrible things that will happen, that might happen, that could happen if this Court interprets the law, as it appears to us, to be written.
William H. Rehnquist: But do you think there had been many mining patents obtained on the basis of discovery of water?
Gerry Levenberg: No, sir.
William H. Rehnquist: Then, really, that is all the government has to go on, on a case like this. In that case the sand and gravel amendments in ’55, sand and gravel were recognized as patentable minerals. They had record of abuses. Here, apparently, your clients are the first ones to have successfully tried this one.
Gerry Levenberg: That appears to be the case. I am suggesting, to you, sir, that the argument that a statute should be interpreted in a given way in order to avoid the prospect of abuse should not prevail here. If that is an argument that ought to be presented to the Congress of the United States when as and if facts are developed to demonstrate to the satisfaction of that political body that its law ought to be amended.
Speaker: Did the Ninth Circuit arrive at this conclusion? Did it take the position you presented to it?
Gerry Levenberg: Your Honor, as the government points out, neither party neither briefed nor argued.
Speaker: Your client came by this by accident.
Gerry Levenberg: Not accidentally but at least inadvertently.
Warren E. Burger: We will resume there at 1:00, counsel. Counsel, you may continue.
Gerry Levenberg: Mr. Chief Justice and may it please the court. At the buzzer, Mr. Justice White, you were asking whether we came to this claim by inadvertence or accident. As indicated, the issue that is briefed here was not briefed below, but I do invite to your attention from page 15a of the Appendix to the government’s petition for certiorari. A description by the Court below of the nature of our location notices, I quote each of the location notices covering claims 1 through 22 described a “piece of mineral-bearing ground as a plaster claim” as distinguished from a claim location of any particular mineral, either surface or underground within that tract of ground. But, it is true that the matters that are being briefed and argued here were not briefed or argued below. I would like, if I may, to address a more fundamental question that you posed this morning to counsel for the government. That is, whether the government’s position here is inconsistent with the government’s position in California versus the United States. The government, not surprisingly, says “of course, it is not. We think it clearly is. The government argues in California versus the United States that Section 8 of the Reclamation Act which it describes in its brief in this case as similar in nature to Section 9 and Section 17 of the mining laws. The government takes the position in California versus the United States as it has in virtually every case involving Section 8, that in spite of the language written by Congress in the Reclamation Act protecting the state’s concerns and interests with respect to water.
Speaker: And despite the Dessert Land Act?
Gerry Levenberg: And despite the Dessert Land Act. A narrow reading of Section 8 is required, whereas, in this case the broadest conceivable reading of Section 9 and Section 17 is required.
William H. Rehnquist: But your case does not turn in any way on Section 8 of the Reclamation Act.
Gerry Levenberg: No, sir, it does not. It turns on the language in Section 1 of the mining law of 1872 which says “all valuable minerals except as otherwise implied.
William H. Rehnquist: It does not turn at all on the Reclamation Act of 1902.
Gerry Levenberg: No, we are not basing our claim on the Reclamation Act. We do address in our brief but we regard to be the government’s inconsistent positions with respect to what it now calls an unmanageable dual system brought about, I assume, or that would be brought about by the decision of the Court of Appeals below. We suggest to you most respectfully that the unmanageable dual system that the government so fears as a result of this case, it fosters and presses in particular in the Reservation Doctrine cases and in particular in the case that is pending before this court and that will be argued next week in New Mexico versus the United States.
William H. Rehnquist: But now the Reservation Doctrine is not involved in California against the United States.
Gerry Levenberg: No, it is not. To the best of my knowledge, it is not. I was moving on from what we regard to be the inconsistency of the government’s position with respect to its attitude that Section 8 of the Reclamation Act, although it purports to protect state interest, must be read very narrowly, whereas, the language of Section 9 and Section 17 of the mining laws, the government argued, should be read in its broadest terms and going beyond, as we see it, the protection of vested rights. The government, in its brief in this case at Page 20, in a footnote refers to the Federal Power Act as another example of the kind of Act that was based upon the sort of concerns the government perceives in Section 9 and Section 17 of the mining laws. The fact is that this Court in, First Isle made it very had clear and this Court in Arizona versus California confirmed that Section 27 of the Federal Power Act upon which the government, in two ways adverts in its brief, was no more than a saving clause. I now quote from Footnote 93 of this Court’s decision in Arizona versus California, C1 Isle “where this court limited the effect of Section 27 of the Federal Power Act which expressly saved certain state laws to vested property rights. That is precisely the position that we take here. That is what at issue here in our judgment. The extent to which, state water rights are to be protected under the mining laws of 1872, as Congress has so clearly said, are vested state rights. We do not argue, and as the government would like to attribute to us, that those rights must have vested prior to 1866 or prior to 1870. We say that they could vest tomorrow so long as they vested prior to the discovery of water as a locatable mineral under the law of 1872. With respect to the government’s position in so far as the Reservation Doctrine is concerned, we think that it is worth inviting to the court’s attention contrary to the argument that was made earlier by the government of no inconsistency, what the holder of mining claims in the Gila Forest that is involved in the New Mexico case to be argued next week. It views the government’s position, in that case, is contrasted to the government’s position articulated in its brief in this case, specifically at page 23 of the amicus brief on behalf of MolyCorp in 77-510 to be argued next week. It is stated, in Charlestone the government argues that the decision of the Court of Appeals in that case “would cast doubts on rights long thought to be established under state and local law, and would unsettle the law of water rights in the western states. That is a quote from the government’s brief in this case. We agree, but find the government’s position there to be irreconcilable with its position in this case. Here, the government argues, in New Mexico, that private water rights which have evolved over the last 100 years should be subjected to an undefined reserved water right of the United States, cited in the US brief in the New Mexico case at page 30. Although the government does not address the consequences of its assertion, it follows from the government’s claim for reserve water for the present and future needs, citation of the government’s brief of the federal forest for “aesthetics, recreation, etcetera. That the very same rights which the government seeks to preserve in Charlestone will be seriously undermined if its position here is accepted. We think that it is quite clear that the dual management system, which the government contends, would be brought about by affirmance of the Court of Appeals’ decision below is here. It is already here. The government makes a reservation claim of an unquantified, undetermined amount. There are interests that it seeks to protect in that case that are private interests. The government’s brief there points out that it has issued 1600 permits to cattle grazers to run 29,000 cattle through the force. Those are private rights. The Court of Appeals below did not invent or create the dual management system. Congress did, with respect to mining rights in the 1872 law. Congress said “all valuable minerals may be subject to location, and the lands thereon subject to purchase.
Speaker: You could be quite right in your argument, I suppose, about the relationship between the mining laws and the Dessert Land Act and still lose just because water is not a mineral.
Gerry Levenberg: That is conceivable.
Speaker: How about that question? The Department of Interior’s position is consistently that water is not a mineral. It is not because water rights are subject to local law or anything. It is because water is not a mineral.
Gerry Levenberg: I am not sure that that is the case, Mr. Justice White. It strikes me from my reading.
Byron R. White: Does the Department of Interior ever take the position that water is a mineral but it just so happens that it is not disposable under the mining laws?
Gerry Levenberg: No, they have not done that.
Byron R. White: They never said water is a mineral?
Gerry Levenberg: Not to the best of my knowledge. But they have made the decision, so far as I am aware of, in the context of reference to Section 9 and Section 17 that water rights are something to be taken care of under state law.
Byron R. White: That maybe so but there is still the question of whether water is a mineral.
Gerry Levenberg: That is correct.
Byron R. White: What about that question?
Gerry Levenberg: We think that while, as we point out in our brief, the judicial authority on that is really quite sparse.
Warren E. Burger: Sparse?
Gerry Levenberg: There is not very much on it.
Byron R. White: Why do we have to get to the argument about water rights and mining laws? What about the threshold question about whether water is a mineral?
Gerry Levenberg: We argue, and I believe that there is sound authority for our position, that water is a mineral, that it was regarded by the Congress as a mineral, and that the question whether water is a locatable mineral really depends upon whether those who claim it can demonstrate that it is valuable which is a keyword, as we see it, in the 1872 law. That demonstration and that issue has very well articulated standards that have been set forth by this court and followed by the Interior.
Byron R. White: Were gas and oil locatable mineral?
Gerry Levenberg: Gas and oil were dealt with separately under separate statutes.
Byron R. White: I know, but are they minerals within the meaning of that law?
Gerry Levenberg: The mining law of 1872? No, because the mining law of 1872 begins with the language “except as otherwise provided” then there are specific identifiable statutes that deal with the discovery of gas and oil as there are with respect to the discovery of coal and potassium and phosphate, and a number of other minerals.
Speaker: Your answer is not no, but yes, gas and oil probably are minerals but not dealt with out of the statute.
Gerry Levenberg: I am sorry, but not locatable minerals under mining law of 1872. That is correct.
William H. Rehnquist: Would you say that earth-qua-earth is a mineral?
Gerry Levenberg: The government argues that that is the inexorable consequence of this court affirming the Court of Appeals’ decision below. No, I would not say that earth-qua-earth is a locatable mineral.
William H. Rehnquist: Why is it, because it is not a mineral?
Gerry Levenberg: Pardon me?
William H. Rehnquist: Because it is not a mineral?
Gerry Levenberg: The standard still is whether it is a valuable mineral and in the context of the claim that has been made.
Speaker: I just bought some soil the other day. It was pretty expensive.
Gerry Levenberg: I am sure that it was. We do not claim nor do you have to decided in this case that earth is a locatable mineral.
William H. Rehnquist: But you have got to show us some way to tell why water is and earth is not, other than just saying that it has to be valuable. Because, certainly, by the standard of value you can say that a 20-acre plaster claim consisting solely of earth is valuable by the prudent man standards.
Speaker: I guess the question is what congress intended by the word “mineral. At least that is one question. It might have not intended to include water even if water is a mineral.
Gerry Levenberg: That is certainly conceivable, Your Honor. The fact is that there is very, very little in the Legislative History of the 1872 mining laws.
Warren E. Burger: Would it not be reasonable that, as the Court has often said, that we read legislation in terms of what the ordinary meaning given by ordinary people to the words used at the time they were used? In ’72, did they regard water as a mineral?
Gerry Levenberg: There is no evidence that water was not regarded as a mineral, Mr. Chief Justice.
Warren E. Burger: Is there any evidence that it was regarded as a mineral?
Gerry Levenberg: I think that it is as reasonable to argue that the attention that the Congress devoted to water by excluding those vested water rights within the mining laws is evident that Congress indeed regard water to be a mineral.
Speaker: How do most dictionaries define mineral? Do they include water?
Gerry Levenberg: I am afraid I cannot answer.
Speaker: If they had, you would be citing them, I suppose.
Gerry Levenberg: I may well have done that.
Warren E. Burger: I can give you a little help. I looked at five of them and none of them included water, and all of them had a common denominator of solids as its meaning.
Gerry Levenberg: The Ninth Circuit, again, in another case, in which cert was denied in this court in the geothermal steam case. In fact, it concluded that water is a mineral. That is a case in which the Ninth Circuit opinion that is being challenged here was relied upon. That is the Union Oil case. I do not know what the dictionary says about water.
Warren E. Burger: Sometimes there are minerals in suspension in water or minerals in suspension in other fluids, but does that make water per se a mineral?
Gerry Levenberg: No, I would not think that it does. I think that the best evidence that there is that the Congress regarded water as a mineral in the mining laws is the fact that it was concerned to be sure that those local customs of the states and territories in so far as the acquisition of water rights to that time were protected in 1866 and the 1870 Acts. I would leave it there.
Warren E. Burger: Very well. Mrs. Beale, do you have anything further?
Sara Sun Beale: Just one or two very brief points, first, on the court’s question as to generally what is a mineral. The government would contend that there is no one single definition of the term “mineral” for all purposes. I would point out to the court that, originally, the mining laws or at least at some point in their history were construed to apply to oil and gas which later then dealt with more specifically in the mineral leasing laws. That is my understanding. I do not think that one can assume.
William H. Rehnquist: Oil was a mineral for those purposes?
Sara Sun Beale: That is my understanding. Oil and gas were construed.
Speaker: It is a good liquid mineral.
Sara Sun Beale: I was just about to add.
Speaker: If one perceives on the hypothesis of the childhood game that everything is animal, mineral, or vegetables, certainly, water is a mineral.
Sara Sun Beale: That is correct. We think that that kind of a very broad definition, as the Interior Board of Land Appeals said, just makes no sense in this context.
Warren E. Burger: I have a dictionary in front of me and it seems to fall well within this definition.
Sara Sun Beale: Yes, I would think that. We would have to agree that within the broadest definition of the term “mineral” as an animal, vegetable, and mineral, water is included and dirt is included. We do not think that there is any suggestion or any evidence but that is what Congress was thinking of when it allowed the exploration discovery of valuable minerals.
Speaker: Do you think it must go to some other statutory plan to get water out from under the word “mineral.
Sara Sun Beale: I do not think that is quite the way I would phrase that. I think when we look at the mining statutes themselves, we see water treated separately.
Speaker: What if there was no Dessert Land Act?
Sara Sun Beale: And with no provisions in the 1866 and 1870 mining laws themselves, then I would think we would rely upon the Interior Board of Land Appeals’ construction. I would think that that would be very wavy as to how the Acts have been construed.
Speaker: And then you would say water was not intended to be a mineral.
Sara Sun Beale: That is exactly correct. From the 1880s on and a whole series of decision which we find very persuasive.
Speaker: What do they say about mineral water?
Sara Sun Beale: That goes to springs case that that is not a mineral. The only other point that I would like to draw to the court’s attention is that respondents have tried to emphasize the narrowness of this decision and the fact that if the mineral laws were construed as an alternative way of acquiring water rights, that really would not unsettle the law. The western water law would not throw established rights to question and so forth. But, the very point upon which the Court of Appeals and respondent relied is the fact that a mining claim need not specify what mineral it is located for as the claims here did not indicate sand and gravel or water, unless someone later, these claims were located in 1942. Now, at this late date, it is possible for respondents to claim that they were located for water. There are many claims outstanding that were located in 1940 and 1950 or whenever. It would be possible now to attempt to validate those on the theory that water was present. One can imagine, of course, the difficulties that trying to harmonize those rights with the rights acquired under state law would cause. The final point is that the Court of Appeals theory at least was that the value of the mineral deposit here was shown by the fact that water has an intrinsic value in the dessert region. It seems to me if that construction were adapted, it would substantially lessen the impact on the prudent man and marketability test, and so forth. If you could find water, you could argue under this decision that your claim, just simply by showing water was present in an arid area which, would shell a valuable discovery.
Thurgood Marshall: We really know in order to decide this case, we do not have to say in front of God or anybody that water is a mineral, do we?
Sara Sun Beale: That water?
Thurgood Marshall: Is a mineral, do we?
Sara Sun Beale: No. Our contention is that water is not a locatable mineral under the mining laws. If there are no other questions?
Warren E. Burger: Thank you, counsel. The case is submitted.