Opinion ID: 163954
Heading Depth: 2
Heading Rank: 2

Heading: Substantial Compliance with Annual Assessment Requirement

Text: 39 Plaintiffs argue: (1) DOI failed to establish by clear and convincing evidence that work had not been done in long-past years, Plaintiffs-Appellants' Br. at 3; (2) DOI erroneously disqualified as assessment work road-maintenance work performed by Exxon; (3) plaintiffs satisfied the substantial compliance requirement of Hickel; and (4) plaintiffs' performance of $500 worth of work per claim, which is required to qualify for issuance of a patent, satisfies the assessment work requirement. 40 [F]orfeiture of a mining claim for failure to do annual labor must be established by clear and convincing proof that the former owner has failed to have performed the required work or made the necessary improvements. United States v. Herr, 130 I.B.L.A. 349, 358 (1994). In reviewing the IBLA's application of that standard, we must determine whether its conclusion that there was clear and convincing proof that plaintiffs had failed to perform the required assessment work was arbitrary, capricious or an abuse of discretion, or is unsupported by sufficient evidence in the record. We hold that it was not arbitrary, capricious, or an abuse of discretion, and enjoys sufficient evidentiary support in the record. 41 Plaintiffs argue the IBLA's decision upholding the ALJ is supported by nothing more than speculation and conjecture. After carefully reviewing the administrative record, we disagree with that assertion. The ALJ reviewed reports prepared by mining engineers and examiners who conducted on-site inspections, reviews and interviews in 1928, 1931, 1984, 1986, 1993 and 1995. Mineral reports were prepared on both plaintiffs' patent applications. Aerial photographs taken at various times were examined. 8 42 While plaintiffs assert that the ALJ simply made unfounded speculations about decades-old activities, we view the ALJ's analysis, affirmed by the IBLA, as articulating a rational connection between the facts found and the decision made. 9 43 Plaintiffs argue that the possibility of erosion, revegetation, and other natural forces makes it extremely difficult to accurately assess the condition of the terrain, particularly any assessment work done in prior years. The ALJ explained, however, why DOI examiners were able to accurately evaluate the assessment work despite the undeniable influence of weather on the terrain: 44 While erosion, revegetation, and vegetation density are factors adversely affecting a field examiner's ability to locate assessment work, the Departmental examiners were thorough in their examination and have shown that small excavations dating back to the 1920's (the pits on the TOSCO claims and those nearby but outside of the Exxon claim group) can be located with a high degree of success. 45 ALJ Decision at 49, Deferred Jt. App. at 2596. Moreover, as we have stated, [t]he IBLA may draw reasonable inferences from the evidence. IMC Kalium Carlsbad, 206 F.3d at 1011. The ALJ recognized the possibility that work done long ago on the TOSCO claims might be difficult to detect, but he concluded that the evidence supported the conclusion that such work, under the circumstances, likely was not performed and would not be qualifying in nature: Those circumstances include the absence of any evidence of excavations, drill holes, or other mining activity for the assessment years ending in 1929 through 1957 and the assessment years ending in 1960 through 1974, the lack of economic incentive to develop the claims, and the fact that most of the trails and roads are likely associated with improvements and activities related to grazing rather than mining. For these periods, there is no evidence of mining activity, and little evidence of the likelihood thereof, which might necessitate road maintenance to allow access. 46 ALJ Decision at 45, Deferred. Jt. App. at 2592. 47 Plaintiffs argue further that the ALJ and IBLA were hyper-technical in their approach to plaintiffs' claim that their development of water sources and rights should be considered assessment work. The ALJ and IBLA rejected the water work as qualifying assessment work: 48 [Plaintiffs'] efforts to develop an economically viable oil shale industry have little, if any, relevance in determining whether compliance with the assessment work has been sufficiently substantial to demonstrate a diligent good faith effort to develop the specific mining claims being contested. A claimant may show no inclination or effort to develop a particular set of claims and yet display a keen interest in expending time and money to develop a viable industry for recovering the mineral which happens to exist on those and many other claims. While some of the expenditures relating to the acquisition and development of water sources and rights relate more directly to these particular claims, the water is not needed for extraction of the oil shale but for retorting and other processes. It therefore does not qualify as assessment work. Further, because these water expenditures benefit other nearby patented claims held by [plaintiffs], their tendency to show the good faith of [plaintiffs] in developing the contested claims is slight at best. 49 ALJ Decision at 41-42, Deferred Jt. App. at 2588-89 (citation omitted). 50 Having carefully reviewed the record, we cannot say that the ALJ's careful and thorough decision, affirmed by the IBLA, concluding that DOI had demonstrated by clear and convincing evidence that plaintiffs had not substantially complied with the annual assessment work requirement, is arbitrary or capricious, and we find it has adequate support in the record. 51 Plaintiffs make several more specific arguments, which we address in turn. Exxon argues the IBLA erred in disqualifying as assessment work certain road work it performed. For the years 1973 through 1988, with the possible exception of the year 1974, Exxon filed affidavits stating that it did assessment work of at least $100 per claim. It is undisputed that the work was done. It was exclusively road maintenance work, which the ALJ and the IBLA held was not qualifying assessment work. All parties agree that road maintenance work can qualify as assessment work, provided it is done for the purpose of better developing and operating the claim. United States v. 9,947.71 Acres of Land, 220 F.Supp. 328, 332 (D.Nev.1963) (further quotation omitted); accord Silliman v. Powell, 642 P.2d 388, 393 (Utah 1982) (Road work that directly facilitates the extraction of minerals from claims clearly qualifies as assessment work.). The IBLA rejected Exxon's road maintenance as qualifying assessment work: 52 There is not one shred of evidence that the purpose of the road maintenance was to facilitate development of the claims. Unlike the nearby oil and gas road, the poor roads leading to and traversing the claims were not improved to allow passage of heavy equipment necessary for drilling or other development activity, but rather, they were merely maintained. The roads do not lead to any excavations or other mining activity performed or planned subsequent to 1973 because there have been none. 53 United States v. TOSCO Corp., 153 I.B.L.A. 205, 209 (2000) (quoting ALJ Decision at 49, Deferred Jt. App. at 2596). That conclusion is not arbitrary or capricious and is supported by substantial evidence in the record. 54 Plaintiffs also argue that their performance of $500 worth of work per claim, which 30 U.S.C. § 29 requires for the issuance of a patent, satisfies the annual assessment work requirement of 30 U.S.C. § 28. The ALJ, the IBLA, and the district court all rejected this argument, as do we. As the ALJ explained, §§ 28 and 29 serve two distinct purposes and have distinct minimum standards. ALJ Decision at 40, Deferred Jt. App. at 2587. The $100 annual assessment requirement is to assure that a claimant undertakes a diligent good faith effort to develop the mining claim, and to prevent the location of mining claims for speculative purposes. Id. The $500 requirement before issuance of a patent exists because Congress believed that the expenditure of that amount of money, whether in 1 year or 5 years, would demonstrate a claim's value as a mine. Id. We have never suggested that there is a $500 cap on the annual assessment work requirement. See Cliffs Synfuel, 291 F.3d at 1261 (implicitly requiring assessment work totaling more than $500); see also Andrus v. Shell Oil Co., 446 U.S. 657, 658 n. 1, 100 S.Ct. 1932, 64 L.Ed.2d 593 (1980) (The mining law also provides that until a patent is issued a claimant must perform $100 worth of labor or make $100 of improvements on his claim during each year. ...) (emphasis added). In short, we agree that the $500 worth of work requirement is separate from and does not satisfy the statutory obligation to perform $100 worth of work each year on each claim. 55 For the foregoing reasons, we AFFIRM the district court's decision.