Document: 446 U.S. 657 100 S.Ct. 1932 64 L.Ed.2d 593 Cecil D. ANDRUS, Secretary of Interior, Petitioner,v.SHELL OIL COMPANY et al. No. 78-1815. Argued Jan. 15, 1980. Decided June 2, Syllabus The general mining law 1872 permits citizens to explore the public domain and search for minerals and, if they discover "valuable mineral deposits," obtain title land on which such deposits are located. Mineral Leasing Act (Act), enacted in 1920, withdrew oil shale from provided that thereafter would be subject disposition only through leases, except a savings clause preserved valid claims existent at date passage Act. Upon complaints by Department Interior (Department) alleging respondents' located prior were invalid, hearing examiner ruled ground Department's 1927 decision Freeman v. Summers, 52 L.D. 201, wherein it was held "present marketability" is not prerequisite patentability as compelled conclusion valuable appropriation under laws, despite substantial evidence operations commercially infeasible. Board Land Appeals reversed, holding 1920 failed test value because time location there did appear present fact reasonable prospect success developing an operating mine yield profit. It rejected departmental precedent, particularly being inconsistent with therefore unsound. On appeal, District Court reversed valid, finding Congress had implicitly "ratified" rule any event estopped departing longstanding standard. affirmed. Held : question deposits" patentable Act's clause. history developments subsequent its indicate Government should permitted invalidate pre-1920 imposing marketability requirement claims. original position, set forth Instructions, issued shortly after became law, authorizing General Office begin adjudicating applications patents claims, later enunciated correct view applies Pp. 663-673. 591 F.2d 597, 10 Cir., Lawrence G. Wallace, Washington, D.C., petitioner. Fowler Hamilton, New York City, respondents. Mr. CHIEF JUSTICE BURGER delivered opinion Court. 1 1872, 30 U.S.C. § 22 seq., provides may enter domain, minerals; located.1 In altered this program enactment 41 Stat. 437, amended, 181 seq. several other these leases. A clause, however, "valid maintained compliance laws initiated, perfected including discovery."2 2 presented whether 3 * action involves two groups claimants lands Garfield County, Colo., Act.3 first group designated Mountain Boys Nos. 6 7, 1918. business trust purchased $25,000, 1924 application patent filed Interior. Some 20 years later, extended investigative adjudicatory proceedings, "without prejudice" then vigorously pursued. 1958, Frank W. Winegar acquired new application. 1964, conveyed his interests respondent Shell Oil Company. 4 second known Harold Shoup 1-4, 1917. 1923, Karl C. Schuyler who 1933 bequeathed them surviving spouse. 1960, Mrs. incorporated A. Shale, Inc., transferred corporation. Three months corporation applications. 5 administrative invalid. alleged, inter alia, mineral" consolidated tried 1970 valid. observed established case determining deposit" deposit one justifying expenditures profitable mine. See United States Coleman, 390 599, 88 1327, 170 (1968); Castle Womble, 19 455 (1894).4 He reviewed country found every attempted operation show production. basis showing commercial infeasibility, reasoned "[i]f impression," fail test. However, he deemed himself bound contrary 201 (1927). There, written: 7 "While has been no considerable production shales, due abundant quantities have produced more cheaply wells, possible doubt constitutes enormously resource future use American people. 8 "It necessary, order constitute discovery sufficient support patent, situation can immediately disposed profit." Id., 206. (Emphasis added.) 9 Summers upheld patentable. reversed. Adopting findings examiner, concluded "as . original.) recognized odds ; but precedent considered newly interpretation given prospective effect. reliance rulings minimal responsibility trustee required plainly erroneous decision.5 Accordingly, applied those 11 Respondents appealed Board's ruling Colorado. agreed requiring proof liberalized traditional But 1931 again 1956 rule. Alternatively, now standard investors "relied upon past half-century." Co. Kleppe, 426 F.Supp. 894, 907 (1977). grounds, issue 12 Tenth Circuit 597 (1979). "different treatment afforded all 'valuable deposit' element part reason adoption approval both Houses Congress" 1920. 604. And must adhere We granted certiorari importance management lands. 444 822, 42, 62 29 affirm. II 13 legislative shows consider shale.6 extensive hearings debates preceded Act, intimation contemplated requirement; indeed, appears. During 1919 floor House Representatives, amendment proposed substituted phrase "deposits paying quantities" mineral." That amendment, promptly withdrawn Sinott, manager, voiced objection change: 14 "Mr. SINOTT. language put great deal consideration we like change 'valuable' 'paying.' There quite distinction. line decisions courts what discovery, I think very dangerous matter experiment time." 58 Cong.Rec. 7537 (1919) (emphasis added). 15 An examination relevant underscores point. Those clear rejecting miner "demonstrat[e] vein pay expenses removing, extracting, crushing, reducing ore, leave profit owner," Book Justice Mining Co., F. 106, 124 (CC Nev.1893), "it enough or 'has value.' " Madison Octave 154 Cal. 768, 772, 99 P. 176, 178 (1908) Accord, Cascaden Bartolis, 146 739 (CA9 1906); Ohio 240 996, 998 (Wyo.1916); Montana Cent. R. Migeon, 68 811, 814 Mont.1895); East Tintic Consolidated 43 79, 81 (1914); Lindley, Law Relating Mines Lands 336, pp. 768-769 (3d ed. 1914). generally Reeves, Origin Development Rules Discovery, & Water L.Rev. (1973). 16 To sure, existed uncertainty patentable.7 uncertainty, related "mineral" "value." Similar doubts arisen late 19th century regard petroleum. Indeed, 1896 petroleum concluding "containing precious metals gold, silver, cinnabar etc." open entry. Union 23 222, 227. Secretary's short-lived. 1897, Placer entry oils." Ch. 216, 526. This legislation rest about mineral. shale, strictly speaking, contained kerogen oil, see n. 3, supra, status remained problematic. Reidy, Do Unpatented Shale Claims Exist?, Denver L. J. 9, (1966). 17 nature surrounding evident remarks made throughout 1918 hearings, Congressman Barnett, example, explained: 18 BARNETT. If department contend come within meaning term 'oil lands' perforce, same argument, admit placer act 1897. "The Chairman. patentable? act." 21 Hearings, 918. end doubts. By withdrawing "oil minerals" recognized—at least implicitly—that locatable effect, 1897 done oil. And, Barnett's ready answer demonstrates, once settled location, place preserving pre-existing fully expected simply perceived obstacle end. III Our enacting could satisfy confirmed actions taken Congress.8 24 May 10, less than three "Instructions" Instructions advised follows: 25 "Oil having thus source account thereof extent provisions conditions gas." 47 548, 551 (1920) 26 thereafter. Five rules dependent "character, extent, mode occurrence oil-shale deposits." Dennis Utah, 51 229, 232 (1925). Present profitability mentioned relevant, let alone critical, consideration. 27 1927, decided 201. arose out dispute between claimant applicant homestead involved distinct issues: (1) lean surface warranted geological inference claim rich "valuable" below; (2) patentability. Both issues favor claimant: sound "no [oil shale] people" 28 For next 33 years, without deviation.9 said ensured rights [would] protected perfected." Ann.Rep. all, 523 2,326 covering 349,088 acres theFreeman practice, begun "has peculiar weight [because] contemporaneous construction [the] statute men charged setting machinery motion," Norwegian Nitrogen Products States, 288 294, 315, 53 350, 358, 77 L.Ed. 796 (1933). e. g., National Assn. Securities Dealers, 422 694, 719, 95 2427, 2442, 45 486 (1975); Udall Tallman, 380 1, 16, 85 792, 801, 616 (1965). strong intend impose B 1930 1931, congressional Committees revisited re-examined Congressional interest sparked large measure series newspaper articles charging "improvidently, erroneously, unlawfully, corruptly, individuals private corporations." 74 1079 (1930) (S.Res. 379). based accusations leveled Ralph S. Kelly, Division Inspector Denver. Kelly's criticism centered decision. Fearing another "Teapot Dome" scandal, Senate authorized Committee Public "inquire into alienation lands." seven days focusing almost exclusively "the so-called Freeman-Summers case." Hearings S.Res. 379 before Surveys, 71st Cong., 3d Sess., (1931). At outset E. Finney, Solicitor, 175,000 63 pending. Finney's statement prompted interchange: 31 "Senator PITTMAN: Well, shales patented value? FINNEY: you mean mined now, no. 32 So your locator? 34 No; my opinion. never world, know of, actual commodity take market contrary, case. ." 35 Later Senator Walsh expressed understanding impact decision: 36 WALSH: [It means] prospector layer containing quantity mineral, oil-bearing kerogen, beds down below richer character. 37 formation, yes sir; correct." 138. 38 also id., 22-23, 26, 163. produce report. month completed, Nye, Chairman Committee, wrote 'conferred beg[ged] advise why proceed final pending conformity law.' App. 103. patenting standards inFreeman resumed. 39 virtually time, Representatives commenced own investigation problems relating patents. focused primarily assessment work—whether perform $100 work per year forfeit claim—and discovery. lost Committee: 40 SWING. furtherance policy conservation, Secretary, discovered, understand it, practical economical method extracting competition wells proper withdraw acquisition, since recognize, economic fiscal conditions, going make beneficial immediate future, putting cold storage speculative proposition? "Secretary WILBUR: As say true, meet here leasing effect existing included, so dealing thought question— 42 SWING (interposing). realize that, feeling Congress, country, drawing do want cut person initiated right." Applications Patent Lands, (1931).10 Swing's "feeling comports our reading intent. hold wrongly wholly Moreover, require us conclude 1930-1931 closed eyes major perversion laws. reject conclusion. C 44 turned attention shale. amended eliminating locators convey surfaceland qualify Pub.L. 743, 70 592. Where owner refused cooperate sell estate, prevented claim. James Bell, 197 emphasized principal beneficiaries amendment: ASPINNAL. [bill] does leaseable get far know, just few cases involved, most eastern Utah western bill refers to." H.R. 6501 Insular Affairs 3-4 (1956). 46 Subcommittee 4, 13-14, Reports evince stood gain "Under Bell February 25, covered 1914 act, minerals, acquire outstanding execute deed reconveyance From 1946 1955, inclusive, 71 67 procedure. committee informed unable cooperation owners estate thereby obtaining estate." S.Rep.No. 2524, 84th 2d (1956); H.R.Rep.No. 2198, (1956), U.S.Code Cong. Admin.News, 3391, 3392 48 debate. Were today nonvaluable nullify Congress. IV 49 position certain irony. Its challenge "nonvaluable" comes when increased sharply Nation searches alternative energy sources pressing needs. succeed invalidating old auction, Treasury, doubt, substantially enriched. persuade cannot achieve claims.11 claims.12 judgment 50 Affirmed. STEWART, whom BRENNAN MARSHALL join, dissenting. until 1920.1 discovery." Feb. ch. 85, 37, 451, 193. brought saving usual patentability, instead "discovery" different applies. Court's relaxed applicable. disagree. Since believe fulfill firmly requirements respectfully dissent 54 shred purpose exempting face, version provision identical "coal, phosphate, sodium, gas," perfected. 55 Nothing suggests anything contrary. Descriptions legislators drew distinction See, 59 2711-2712 (Rep. Taylor); 7780-7781 (1919).2 face conflicting subject, well many criteria accord special treatment. 56 Equally unambiguous published These expressly stated: 57 "[L]ands [of gas. Entries will, therefore, adjudicated accordance legal reference limitations applicable gas placers." Such agency entitled weight. 486; 616. directs validity thereunder—including shale—must judged according am convinced nothing read modified mandate. 60 points decision, notes resulted inquiry rejection prevailing generous greater significance, opinion, single remark Representative, committee, approving liberal even though not, event, overridden plain TVA Hill, 437 153, 191-193, 98 2279, 2299-2301, 117; SEC Sloan, 436 103, 121, 1702, 1712-1714, 148. 61 purports find 1956. dealt totally unrelated problem competing estates, here. 592; Sess. drawn events occasions, declined assume turn unpatentable. seems me fallacious interpret indications caution intent exempt principles were, think, properly level simple deposit." Smith, 249 337, 346, 308, 310, 635 (1919). Through judicial decisions, further occurs quality justify prudent man expend labor means Chrisman Miller, 313, 321-323, 468, 470-471, 770 (1905); H. Yard, 59, (1909); 455, 457 (1894). Cameron 252 450, 459, 410, 412, 659 (1920); Casey Northern Pacific 439, 440 (1892). Of controlling significance refinements "prudent test" occurred. First, although demonstrate efforts definitely some profit,3 probably would. Cataract Gold 248, 254 (1914). Cole Ralph, 286, 299, 321, 327, 567 S.Ct., 412; Iron Silver 128 673, 684, 195, 199, 571 (1884).4 Second, probable presently demonstrable, speculative, fact. Davis's Administrator Weibbold, 139 507, 521-524, 628, 633-634, 238 (1891); ("the facts, probabilities future"); 440; Winters Bliss, Thus, pointing highly uncertain changes technological advances attempt success. 65 Each developed rather naturally man" supra. purposes, decide money land, rational 254. mistaken suggesting way otherwise D 66 With respect case, "never law." following factual findings: "First, historical fact, competitive liquid industry. hypothetical studies [in record] best confirm exploitation Third, exception, Fourth, [the respondents] half attempting exploit them. unlikely operated up contest proceedings. 69 "In either dramatic improvement technology alteration forces always prevent shale." seemed acknowledge supported evidence, 598-599, agrees view. 72 reasons stated, agree. aside Appeals. Discovery worth improvements during each expended total $500 §§ 28, 29. Hickel Corp., 400 48, 91 196, 193 (1970). addition, "must distinctly marked boundaries readily traced." 28; Kendall San Juan 144 658, 779, 583 satisfied, $2.50 acre. 37. deadline locator file existence determination. Barrows Hickel, 447 80, 82 1971). which, 193, full: coal, potassium, gas, herein referred to, Lander, Wyoming, coal entries numbered 49, shall form manner chapter, sedimentary rock organic material called destructive distillation, produces amount (1905), approved Interior's "prudent-man requires character "a ordinary prudence justified expenditure means, success, mine." L.D., 457. Best Humboldt 371 334, 335-336, 83 379, 381-382, 350 (1963); (1920). test—whether "extracted, removed marketed profit" deeming logical complement prudent-man "[a]lthough $18,780 perfecting preparing Boy purchase claims] $30,000 [until] initiation proceedings." predecessors invested "more amount" aware feasible Report appreciable ever nor standardized process yet evolved recommended Bureau anyone else, demonstrated industry profitable. 563, 65th (1918). 4271, 4279 (remarks Sen. Smoot); 3232 2812 890, 1257 (1918) (hereafter Hearings). John Fry, witnesses represented candid point: TAYLOR. law. none gone patent. Has acre Colorado patented? FRY. will be? not." 912. 626, 873, 913, 918, 1240, 1256-1257. views hazardous inferring earlier one." Price, 361 304, 80 326, 331, 334 (1960). admonition guided recent decisions. 189-193, 117 (1978); 119-122, 148 (1978). Yet note Chief Marshall's dictum "[w]here mind labours design legislature, seizes thing aid derived." Fisher, Cranch 386, 304 (1805). consequence, while arguments predicated weighed extreme care, hand court Seatrain Shipbuilding Corp. 572, 596, 800, 814, (1980); Red Lion Broadcasting FCC, 395 367, 380-381, 89 1794, 1801, (1969); NLRB Aerospace 416 267, 274-275, 94 1757, 1761-1762, 134 (1974). M. Debevoise, 177, 180 (1960); Strauss, I.D. 129, 140-142 (1945); Location Claims, 631 (1929); Assessment Work Oil-Shale (1928); Standard Shales 522 placing filing permitting lieu annual work. Other aspects patentability—including discovery—were addressed legislation. 2537, proposal indicates apply affect Coleman permissible requirement. overlooks consistently viewed dismisses irrelevancies: states "not Representative" standard; "dealt [a] problem." Post, 676. Neither observations correct. specifically review fear scandal brewing. Rarely received exhaustive scrutiny. scrutiny, disturb practice; Nye continue Similarly, characterize "totally unrelated" blink reality. essential predicate legislation; nonpatentable performed useless act. beginning continuing four decades, treated deference doctrine "contemporaneous [administrative] weight," ante, 676, ignores practice. practice matter. suggestion "future [such] changes" meaningful data Womble test, post, 678, inaccurate. leading treatise observed, "[t]he concept 'reasonable success' 'present facts' relates lode value." Rocky Foundation, 4.76, p. 697, Rev.Stat. 2319 345-346, 309-310, 635. discussion substitute Representative Sinott's response thereto, 663-664, absolutely hand. substitution concerned circumstances exploratory allowed scheme. 7536-7537 quoted involve 7780-7781. 81-82 Royal K. Placer, 86, 89-90 Tinkham McCaffrey, 517, 518 (1891). authorities cited Court, 664, They state need establish certainty exists (1894), "reasonable success" 739, 741-742 998-1004 814-818 120, 123-125 Nev.1893); 771-772, (1908); 768-773

Category: 7