Opinion ID: 439343
Heading Depth: 1
Heading Rank: 6

Heading: The Validity of the Unpatented Mining Claims

Text: 27 After discovery of a valuable mineral deposit upon a properly located claim, the possessory right of the locater is 28 [A] property right in the full sense, unaffected by the fact that paramount title to the land is in the United States [citation omitted] and it is capable of transfer by conveyance, inheritance, or devise. 29 Union Oil Co. v. Smith, 249 U.S. 337, 349, 39 S.Ct. 308, 311, 63 L.Ed. 635 (1919). A fortiori it is a property right which is within the protection of the Fifth Amendment's prohibition against the taking of private property for public use without just compensation. Freese v. United States, 639 F.2d 754, 226 Ct.Cl. 252 (1981). 30 The test approved by the Supreme Court for a valuable mineral deposit is the prudent man test--the discovered deposits must be of such character that a person of ordinary prudence would be justified in the further expenditure of labor and means with a reasonable prospect of success in developing a valuable mine. Actual successful or profitable mining is not required. United States v. Coleman, 390 U.S. 599, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968). 31 Although these well established principles were discussed in the trial judge's opinion, we think he erred in applying them to the facts before him and in granting the government's motion for summary judgment on the ground that the mining claims were invalid for lack of discovery of a valuable mineral deposit. We vacate his decision because: 32 A. The record in this case discloses the singular fact that the government did not move for summary judgment on the ground that plaintiffs had failed to discover a valuable mineral deposit on their claims. The trial judge made his decision sua sponte and in spite of a joint pretrial statement submitted by counsel for the parties in which they agreed that one of the major factual issues which had to be resolved by the court was whether any of the claims was supported by the discovery of valuable minerals. Furthermore, in its brief to this court, the government has not contested plaintiffs' contentions that the trial judge erred in granting the motion for summary judgment on the discovery issue and has not requested us to affirm the decision of the Claims Court on that ground. 33 B. The pleadings, admissions on file, affidavits, and other available materials did not, as required by Rule 56(c) of the Claims Court, establish that there was no genuine issue on the discovery question and that the government was entitled to a judgment on that issue as a matter of law. Plaintiffs have informed us, and the government does not disagree, that the only materials available to support the trial court's grant of summary judgment were the following: 34 1. A written notice of April 6, 1967, in which the plaintiffs terminated a written mining lease theretofore granted to Continental Rare Metals Corporation on the ground that the lessee was unable to produce a marketable grade of river run garnet from the property at any time during the operating season of 1966. However, there was also on file an affidavit by one of the original plaintiffs, now deceased, stating that after the cancellation of the lease, plaintiffs decided to lease the claims to another, who would cooperate with the Forest Service; that in 1973, one of the plaintiffs and a mining engineer found both gold and garnet on the entire area of two of the claims, and that in 1975, the lessee, after making several tests, decided to initiate active mining on the claims, but had been prevented from doing so by various actions of the Forest Service. 35 2. Plaintiffs' plan of operation, submitted to the Forest Service April 26, 1976, in compliance with its regulations, stated that the 1975 test program indicated that both gold and garnet of value could economically be recovered from the claims. 36 3. The decision of the IBLA dated April 19, 1982, affirming the decision of the Idaho State Office of the BLM, that the unpatented mining claims had been abandoned and were void. In its decision, the IBLA did not decide whether there had been a valid discovery of minerals on the claims. 37 4. The November 19, 1981, order of the Office of Hearings and Appeals of Interior which dismissed without prejudice to either party the mineral contest previously filed on behalf of the Forest Service. The administrative law judge made this ruling in view of the BLM decision that the claims were null and void, and stated that the claimants should have the opportunity to pursue their action in the Court of Claims, since there was no basis for him to determine the validity of the claims at the time of the alleged taking. 38 5. An affidavit by a Forest Service Director of the Minerals and Geology Staff in Region I, stating that the Forest Service had not determined whether a deposit of valuable minerals was present within the claims. 39 From our examination of these materials, it is quite clear that they were wholly inadequate to establish, by undisputed facts, that there was no deposit of gold or garnet on the claims, and that if there was such a deposit, it could not be mined and sold at a profit. In these circumstances, summary judgment should not have been granted on behalf of the government even had plaintiffs failed to present any opposing evidentiary material. Adickes v. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The Claims Court erroneously placed the burden on plaintiffs to come forward with evidence to show that they had discovered a valuable mineral deposit. Its opinion stated: 40 Defendant's motion for summary judgment puts the fact of discovery in issue. Plaintiffs' response does not include affidavits or other explanation as to time and nature of a discovery of valuable minerals on each of the unpatented claims it has located which would satisfy the discovery standards listed above. 41 Skaw v. United States, 2 Cl.Ct. 795, 801 (1983). 42 C. We think the trial judge also erred in refusing to consider two documents which plaintiffs relied on to show discovery: 43 1. A letter dated October 9, 1962, by a Forest Service supervisor stating that plaintiffs' lessee had made a valid discovery of minerals on the claim. 44 2. The Wild and Scenic Rivers Study Report and Environmental Statement on the St. Joe River, prepared by the Secretary of Agriculture and presented to Congress in 1968. Among other things, the report stated that it was estimated by the Forest Service that there may be more than 70,000 tons of garnet between Color and Heller Creeks on the St. Joe River, and that the garnet deposits on the St. Joe River might produce about three million dollars in gross revenue if mined. 45 The trial judge refused to consider these documents on the ground that since the Secretary of the Interior is responsible for determining the validity of mining claims, statements by Forest Service employees do not constitute admissions by the government, and that the statements were too general to establish that valuable minerals had been discovered on the claims. Although we intimate no opinion on the weight to be accorded these statements during the trial of the case, we think they should have been considered in connection with the materials the trial judge relied on in granting summary judgment. Section 708 itself provides that the Secretary of Agriculture, through the Forest Service, shall be in charge of administering the Wild and Scenic Rivers Act program on the St. Joe River. The trial judge recognized this and in his opinion stated: 46 The prohibition against dredge and placer mining gives the Forest Service a management directive and an administrative tool. 47 2 Cl.Ct. at 802. 48 Consequently, we think the statements were admissible for summary judgment purposes. Mahlandt v. Wild Canid Survival & Research Center, Inc., 588 F.2d 626, 630 (8th Cir.1978). The report submitted by the Secretary of Agriculture to the Congress should have been considered also, under the rule that public reports issued by agencies of the government, including evaluation reports, are admissible in evidence. United States v. American Telephone and Telegraph Co., 498 F.Supp. 353, 359 (D.D.C.1980). 49 In a footnote to its brief, the government states that in the event this court reverses the decision of the trial judge on this issue, it would be appropriate to instruct the Claims Court to again refer the questions of validity and location of the claims to Interior, in compliance with the doctrine of primary jurisdiction. The government candidly admits that since Interior has already ruled that the claims are null and void, it is doubtful whether that department now has jurisdiction to decide the discovery issue. We agree, and for several other reasons, reject the suggestion. We do not think that the doctrine of primary jurisdiction requires a court to refer a question to an agency where, as here, the agency has declined to decide the precise question on a prior reference by the court. See Atchison, Topeka and Santa Fe Ry. Co. v. Airport Transport Ass'n, et al., 253 F.2d 877, 886 (D.C.Cir.1958). As the Supreme Court has observed, the doctrine of primary jurisdiction is not a doctrine of futility. Local Union No. 189, Amalgamated Meat Cutters & Butcher Workmen v. Jewel Tea Co., 381 U.S. 676, 686, 85 S.Ct. 1596, 1600, 14 L.Ed.2d 640 (1965). 50 It is highly probable that a second referral to Interior would result only in further delaying the trial in the Claims Court, and increasing the expense to both parties. Furthermore, the parties agree that the Claims Court is competent to decide the question, just as district courts frequently do in condemnation cases. See, e.g., United States v. 237,500 Acres of Land, 236 F.Supp. 44 (S.D.Cal.1964). 51 Fairness to the plaintiffs is also a consideration which militates strongly against the adoption of the government's suggestion. Proceedings in the court were suspended for nearly 3 years as a result of the 1979 reference, and plaintiffs' right to a trial has been delayed for more than 5 years. They should not be made to suffer another prolonged delay, when there is no real justification for a second resort to an administrative proceeding. Therefore, the Claims Court should proceed expeditiously to resolve these and other issues remanded in this decision.