Opinion ID: 1198963
Heading Depth: 3
Heading Rank: 2

Heading: State's reservation of its mineral rights[16]

Text: Whereas AS 38.05.185-38.05.275 describe how others may acquire the State's reserved mineral rights, AS 38.05.125(a) describes the scope of those reserved rights. Subsection .125(a) reserves to the State minerals and other resources on land sold or granted by the State. It also reserves the right to explore the same for those minerals and things, and expressly saves and reserves ... the right to enter ... upon said land ... for the purpose of opening, developing, drilling and working mines or wells.... AS 38.05.125(a). Alaska Statute 38.05.130 concerns exercise of rights under the reservation as set out in AS 38.05.125.... Whether section.130 covers the physical act of staking, and whether Hayes's unconsented, unbonded entry to stake in 1982 violated AS 38.05.130, depends on whether subsection .125(a) covers staking. Subsection .125(a) does not mention either staking or locating, but it reserves the right to explore. The term explore is not defined in Alaska Statutes titles 27 or 38 or the State's mining regulations. In applying subsection.125(a), we read explore to have its common meaning: to seek for or after ... to search through or into ... to examine minutely ... to penetrate into or range over for purposes of geographical discovery ... to make or conduct a systematic search.... Webster's Third New International Dictionary (unabridged) 802 (1969). Black's defines exploration in context of mining law as [t]he examination and investigation of land supposed to contain valuable minerals, by drilling, boring, sinking shafts, driving tunnels, and other means, for the purpose of discovering the presence of ore and its extent. Black's Law Dictionary 579 (6th ed. 1990). These definitions are consistent with how exploration is used in Alaska Statutes titles 27 and 38. Cf. AS 27.05.010 (seemingly distinguishing among exploration, development and mining). The American Law of Mining states: Mineral exploration is the orderly search for previously undiscovered or unrecognized ore deposits.... Exploration typically involves a succession of steps, involving the application of both inductive and deductive concepts, in which the explorationist seeks first to locate and then to recognize or prove up a discovery of a minable deposit by utilizing known or theorized deposit models as a guide to ore deposits. 1 American Law of Mining § 1.03[1], at 141. We conclude that explore does not encompass in its common or mining usage the limited and discrete physical act of staking (placing corner monuments with an appropriate notice) carried out by Hayes in 1982. Staking satisfies one of the requirements for acquiring a mineral claim or leasehold preference on public land. See supra, note 13. It is not surprising that subsection .125(a) says nothing of staking, given that its focus is on reserving the State's rights, not on how others can acquire those rights from the State. The focus of subsection .125(a) is also consistent with its origin. Subsection .125(a) seems intended to fulfill the reservation requirement, contained in the Alaska Statehood Act, Act of July 7, 1958, Public Law No. 85-508, 72 Stat. 339 § 6(i), as amended 48 U.S.C. § 21 (1988), which was a condition of the federal transfer of vast amounts of land to Alaska upon statehood. See Trustees for Alaska v. State, 736 P.2d 324, 326 (Alaska 1987). Subsection 6(i) of the Statehood Act required the State to reserve its mineral rights in lands known to be mineral in character. Id. at 341. In requiring that reservation, Congress was concerned with ensuring that the State reserved the rights that would make it economically self-sufficient, see id. at 335, and not with how persons might enter onto those lands in seeking to acquire rights from the State through the process of claim or leasehold location. To read subsection .125(a) in this fashion does not impair the State's rights because the State reserves the right to explore and does not have to stake to obtain mineral rights it already possesses. Nor does this reading significantly affect prospecting practices. It will be rare that claim location will ever be based on immaculate staking. [17] From a practical standpoint, this interpretation of subsection.125(a) does not lessen the protection AS 38.05.130 gives the owners of lands, such as ATS 201, that are subject to the subsection .125(a) reservation. Section .130 is concerned exclusively with compensating the landowner for damages resulting from entries during exercise of rights reserved under subsection.125(a). Exploration, including discovery of locatable minerals, is the prospecting activity that is predictably most damaging to the surface estate. Staking, as such, requires acts (placing corner markings and posting notice) that are unlikely to damage the surface estate. Also, often any successful exploration which is part of the location process will be relatively contemporaneous with staking, and the mandatory agreement or bond covering exploration will encompass all aspects of the prospector's activities, including staking. That, however, is not the situation here, where the landowners contend that the limited act of staking alone, without more, violates section .130, and do not assert that Hayes did anything other than enter for the limited purpose of staking. [18] Absent a claim the staking entry itself caused financial harm to the landowners' estate, the type of protection contemplated by section .130 (financial indemnification) is inapplicable. As long as the landowner is financially protected against damage, the would-be explorer can enter without offending section .130. Section .130 does not purport to protect a simple right of quiet enjoyment, but addresses only harm that can be remedied by compensation. [19] A purchaser of lands sold subject to the subsection .125(a) reservation must anticipate that the reserved rights might someday be exercised. Section .130 does not allow the landowner to altogether close the land to entry by persons seeking to exercise those rights, much less prevent a prospective locator from entering the land to stake claims. Even if the landowner refuses to reach agreement, section .130 effectively allows the would-be locator to force entry by posting bond satisfactory to the Director of the Division of Lands. Section.130 does not purport to address staking that does not cause physical damage to the land, nor does it address harmless nonintrusive activities, such as airborne aeromagnetic surveys. The two members of the court who would hold that section .130 does not apply to Hayes's 1982 staking activity do not conclude that such landowners are without remedies. If DNR finds that mining would be incompatible with significant surface uses (perhaps where the surface owner resides on a potential location site), DNR may close the land to mineral location under AS 38.05.185(a) and AS 38.05.300. Such closure would prevent any entry for purpose of mineral location. To the extent staking actually causes damage, the landowner has access to common law remedies. The Alaska Constitution confirms that the State's reservation of access to resources shall not unnecessarily impair the owner's use, prevent the control of trespass, or preclude compensation for damages. Alaska Const. art. VIII, § 9. There is no absolute privilege to enter to prospect on such lands. A person tortiously causing damage must make the landowner whole. The landowner also has some statutory protection. A trespasser who intentionally cuts trees without consent may be liable for treble damages. AS 09.45.730. Likewise, AS 09.45.735 permits treble damages against one who intentionally trespasses to gather geotechnical data or take mineral resources.... [20] In its analysis the superior court compared analogous federal statutes dealing with conveyance of public lands. In our view this analysis is not helpful, largely because we consider Alaska's statutory scheme sufficiently clear that little is gained by referring to dissimilar federal statutes. Thus, comparing the Stock-Raising Homestead Act, 43 U.S.C. § 299 (1988), with the Agricultural Entry Act of 1914, 30 U.S.C. § 121-22 (1988), provides little guidance as to the purpose and scope of AS 38.05.125(a) and .130, or their relationship with AS 38.05.185(a). Also, both federal acts refer to prospecting, a term not used in subsection .125(a) or section .130. The federal statutes are also more explicit than AS 38.05.125(a). Comparing the two federal acts does not help determine whether AS 38.05.130 applies to staking unaccompanied by exploration or discovery. Further, as the State's amicus brief notes, few cases interpreting the federal surface damage statutes have dealt with similar facts. The superior court also held that Hayes's failure to satisfy 11 AAC 96.140(10) invalidated his asserted leaseholds. That regulation requires that a locator make good-faith attempts to agree with the surface owner or post bond before conducting mineral exploratory activity on land in which the State has reserved a mineral interest. [21] The act of staking, without more, is not mineral exploratory activity. A locator who stakes without consent, therefore, does not necessarily violate this regulation. There is no claim Hayes conducted unauthorized exploratory activities before he staked in 1982. Therefore, two members of the court are of the opinion that 11 AAC 96.140(10) does not apply. The landowners argue that Hayes's entry also violated AS 09.45.060, which prohibits a person from entering upon land except in cases where entry is given by law. [22] If Hayes's 1982 staking entry was not pursuant to rights reserved under AS 38.05.125(a), under what authority did Hayes enter ATS 201? In our view that authority is found in AS 38.05.185, which maintains the availability of state lands, and thus ATS 201, to mineral location unless withdrawn by the commissioner. This is consistent with constitutional and legislative expressions of a policy that encourages development of mineral resources. Alaska Const. art. VIII, §§ 11, 12; AS 38.05.185,.195, .205, .300. It is also consistent with long-standing practice in Alaska, and other western states, of encouraging prospecting on public lands. Rickert v. Thompson, 8 Alaska 398, 415 (1933), aff'd, 72 F.2d 807 (9th Cir.1934). It has long been recognized in the western states that the mineral estate is dominant to the surface estate. Norken Corp. v. McGahan, 823 P.2d 622, 628 (Alaska 1991) ([T]he mineral estate is the dominant estate, carrying with it the right to make such use of the surface as is reasonably necessary to remove the minerals); John F. Welborn, New Rights of Surface Owners: Changes in the Dominant/Servient Relationship between the Mineral and Surface Estates, 40 Rocky Mtn. Min. L. Inst. § 22.02 (1994). Even assuming that rights of surface owners are either dominant or require full compensation when harmed by exercise of rights of access to the reserved mineral estate, the owner of the surface estate cannot altogether deny access to the mineral estate. Cf. Norken Corp., 823 P.2d at 628 n. 5.