Court Opinion

ID: 9559629
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:32:31.069433+00
Date Added: 2024-06-11T09:11:26.475311
License: Public Domain

RABINOWITZ, Justice,
dissenting.
The court’s opinion opens up all privately-held land in Alaska that was once owned by the state to forced-entry staking-and-location mining. It denies landowners the right to bar unauthorized entry onto their land and it eviscerates the protections afforded by the mining code’s bonding requirements. I dissent.
The primary fault in the court’s opinion is its assumption that the legislature has authorized claim staking of the state’s reserved mineral interests on privately-owned lands. Pursuant to the Statehood Act and AS 38.05.125, the state reserves mineral rights in itself whenever it conveys land to a private party. In 1981, the legislature amended AS 38.05.185 to make staking the presumptive means of acquiring the state’s mineral interests on “state land.” The court concludes that because the state retains the mineral rights when it sells land to a private party, such land remains “state land” for purposes of the staking authorization provided for in AS 38.05.185. Maj. op. at 562-563. Even land where a private party has built a home or business is open to forced-entry mining under the court’s construction of Alaska’s mining code. I reject this approach. Legislative history, the mining code, and this court’s precedent amply demonstrate that land that has been transferred to a private party is not “state land” for purposes of section .185’s authorization of claim staking. Alaska Statute 38.05.185(a) states in relevant part:
State land may not be closed to mining or mineral location except as provided in AS 38.05.300 and unless the cominissioner makes a finding that mining would be incompatible with significant surface uses on the state land. State land may not be restricted to mining under lease unless the commissioner determines that potential use conflicts on the state land require that mining be allowed only under written leases....
The court concludes that this text authorizes Hayes to stake mining claims on A.J. Associates’ property. Maj. op. at 562-563, 566-567. I agree that section .185 authorizes claim staking, but not on private lands.
The legislative history behind section .185’s staking provision indicates that it was only intended to apply to state-held surface lands. The statutory language quoted in the previous paragraph was added to the mining code in 1981 as a result of a controversy generated earlier that year by an Attorney General’s opinion. See infra pp. 50-51. The Attorney General determined that section 6(i) of the Statehood Act requires that mineral deposits in state mineral lands be mined only under written leases. See 1981 Formal Op. Att’y Gen. 113, at 117 (hereinafter 1981 AG’s Opinion). In other words, the lease requirement applies to all lands known to have minerals at the time they were granted to the state by the federal government. See Trustees for Alaska v. State, 736 P.2d 324, 340-42 (Alaska 1987).
Prior to 1981, the state understood the leasing requirement as only applying to lands which the state had subsequently transferred to others. It did not contemplate that a lease was required to mine on state lands. The standard view was summed up by Commissioner Phil Holdsworth, the first commissioner of the Department of Natural Resources. He believed that under section 6(i), “the usual mining rights contingent upon discovery and appropriation [i.e., staking] will apply on State public domain lands_” However, “[m]ineral deposits which have been reserved to the State in the conveyance *577of lands [in accordance with AS 38.05.125] ‘shall be subject to lease by the State as the State legislature may direct.’ ” Phil R. Holdsworth, Presentation to the Fourth Annual Mining, Mineral, and Petroleum Conference, Anchorage, Alaska, April 4, 1959 (quoting in part to section 6(i) of the Statehood Act of 1958, Pub.L. No. 85-508, 72 Stat. 339), quoted in 1981 AG’s Opinion, supra, at 154-55. In other words, it was believed that staking was allowed on all surface lands owned by the state. But to mine the state’s reserved rights in lands which had been conveyed to private parties, the miner would first have to acquire, a lease, “as the State legislature may direct.” Id.
The 1981 Attorney General’s Opinion unsettled this understanding by construing the lease requirements as also applying to' lands whose surface was owned by the state. As a consequence, the validity of mining claims that had been staked on state lands' was thrown into question. Miners protested this change in the law and sought relief from the legislature. David Heatwole, the President of the Alaska Miner’s Association, warned miners of the threat to their claims posed by the extension of the leasing requirement. In a letter to the membership, he argued that the section 6(i) leasing requirement “applies only to land on which surface rights have been sold by the state.” He noted that application of a leasing system to state lands would mean “loss of rights to acquire mineral rights by discovery and location” and “loss of rights to self initiate a mining investment.” David Heatwole, Letter to Membership of Alaska Miner’s Association, available in Legislative Research Agency, Response to Representative Charles Anderson’s Mineral Leasing Research Request # 81-39, Feb. 28, 1981.
The section .185 staking provision was added to the mining code in direct response to this controversy. The legislature sought to restore the status quo as it had existed prior to 1981. In the hearings before the House Resources Committee on the seminal bill (House Bill 350, 12th Leg., 1st Sess. (1981)), Representative Rick Halford, the bill’s prime sponsor, testified that it was intended to allow miners to continue mining despite the new requirements imposed by the Attorney General’s Opinion. See Hearing on H.B. 350 Before the House Resources Comm., 12th Alaska Leg., 1st Sess., Tape 17 side B No. 1671 (April 30,1981) (statement of Rep. Rick Halford). Bob Maynard, the Assistant Attorney General who authored the 1981 Attorney General’s Opinion, testified that the purpose of the bill was to alleviate, problems that were created for miners by the opinion. Id. at No. 1572. In other words, the staking provision was intended to allow staking-and-location mining to continue where it had previously been authorized, on state-owned surface lands. To this end, the legislature amended section .185 to permit staking on “state land.”
The court relies on the definition section of the mining code to conclude that “state land” includes privately-owned surface lands if the state has retained the mineral rights.- Maj op. at 562-563. I do not believe the cryptic reference to “resources” in AS 38.05.965(19) is sufficient to impose the regulatory regime intended for state-held surface land onto privately-held lands. The word “land” is commonly understood to mean the surface, not the minerals buried underneath it. The legislative history of section .185 leaves no doubt that when the legislature authorized staking on all “state land,” it had this common definition in mind, not the counterintuitive definition embraced by the court. The staking provision of section .185 relied on by the court was intended only to alleviate the problems created by the 1981 Attorney General’s Opinion. The legislature sought to allow staking to continue where it had previously been permitted, on state-owned surface lands.
The notion that the word “land” as used in the code means surface land is consistent with the decision of this court in State v. Weidner, 684 P.2d 103 (Alaska 1984). There we had occasion to interpret AS 38.05.300, which prohibits the closure of parcels of “state land” larger than 640 acres to multiple purpose use. Section .300 is part of Chapter 5 of Title 38, and thus falls within the sweep of the' statutory definition of “state land” relied on by the court in the instant case. In Weidner, a unanimous court determined that *578“state land” refers only to “retained state land.” Id. at 111 (emphasis in original). Whenever the state sells surface land, the mineral interest remains in the state pursuant to AS 38.05.125. In Weidner, however, the classification of state surface land for disposal, without any conveyance of the mineral estate, was adequate to terminate the status of the land as “state land.” The Weid-ner court had no difficulty concluding that when the surface estate is sold, “the land ceases to be state land.” Id. at 112.1
Pursuant to AS 38.05.125, the state reserves the mineral interest whenever it conveys land to another party. Under the court’s interpretation of the mining code, any lands which have ever passed through state ownership are open to third-party staking- and-location mining. It does not matter that the land is now the site of a private home or business or is put to some other private use. Anyone who has the inclination to do so may now enter onto private property and set up monuments and markers and establish a mining claim. If a homeowner’s lot has previously been owned by the state, the homeowner will have no power to prevent a miner from setting up his monuments and markers in her front yard.
Alaska Statute 38.05.130 at least requires a miner to post a damage bond before engaging in forced-entry mining on a private party’s property. The court’s opinion acknowledges this requirement only to eviscerate it. The court holds that even if a miner fails to post a bond, he cannot be ejected from the property. Op. at 567-568. Instead, the court holds that the landowner may only seek post-hoc indemnification. This ruling renders a nullity the assurance of payment afforded by the bonding requirement. The code specifically provides that “[mining] rights may not be exercised ... until” a bond is posted. AS 38.05.130. If the miner can begin digging or drilling without posting a bond, the private landowner is left completely unprotected in the event that the miner turns out to be judgment proof, or if the damages exceed the miner’s resources.2
One cannot overemphasize the deleterious consequences of the court’s opinion. Any real property that was once in state ownership is now subject .to staking-and-location mining. A miner can now stake claims, by erecting stone or post monuments, in the front yard of a private homeowner and dig up the owner’s flower beds in pursuit of minerals. Land that has been purchased by a conservation group and set aside for environmental preservation can be mined. A private business can be forced to stay its use of its own land in order to accommodate mining. There is nothing that a private landowner can do to stop forced-entry mining of his property. Given that the right to exclude is a fundamental component of property rights, and the high value Alaskans *579place on the rights of quiet enjoyment and privacy, I believe that legislative review of the provisions of Alaska’s mining code in light of the court’s opinion is essential.3

. The mining code itself reflects the legislature's understanding that "land” denotes the surface, not the minerals. For example, AS 38.05.130 regulates the exercise of the state's reserved mineral rights on private land. The minerals in question in that statute are owned by the state. Nevertheless, where section .130 refers to the private owner of the surface estate, it describes him as "the owner of the land.” See AS 38.05.130, lines 3-4. The ownership of the surface and mineral estates is clearly separated, and the statute distinctly refers to the surface estate as "the land.”

. This concern is not merely hypothetical. In this case, several of AJ. Associates' commercial ventures are threatened by Hayes's activities. The company has already spent $100,000 on preliminary engineering for a joint venture with Arrowhead Transfer and Alaska Marine Lines; it has negotiated and signed a $565,000 bond with the city of Juneau, committing itself to add additional infrastructure to the property; and a third party has purchased part of the land and entered into a $ 1.2 million contract to build a boat terminal on it. As AJ. Associates has noted in a letter to DNR:
To stop our plans now to accommodate mining will be extremely difficult.... Taku smokery will be damaged due to our inability to vacate our facility. Our construction mobilization expenses for Knik are committed. Arrowhead will be committed to a builder. Our cost of capital will be tied up.
The letter concludes by noting that if Hayes is to compensate A.J. Associates for all costs that would result from a stay of its operations, he will have to post "a bond in excess of $10,000,000.” It is fairly apparent from the record that Hayes could not produce such a sum. By dispensing with the bonding requirement, the court’s opinion virtually guarantees that AJ. Associates will suffer substantial damages that it will never be reimbursed for if it is forced to accommodate mining on its property.

. Alternatively, I wish to express my agreement with the'superior court's conclusion that "exploration,” as used in section .125(a), includes staking. The focus of my disagreement with the court’s construction is with its conclusion that staking does not fall within the rights reserved under section .125(a) and therefore is not an activity encompassed within the protective provisions of section .130.
As a matter of statutory interpretation, I conclude that the comprehensive reservation provisions of section .125(a) (particulary the right at any time to enter upon the surface estate of private lands for the purpose of exploring and opening the state’s reserved minerals estate) encompass staking activities. The court's opinion implicitly recognizes this view in its adoption of the definition of staking found in the American Law of Mining where it is stated:
Exploration typically involves a succession of steps, involving the application of both inductive and deductive concepts, in which the ex-plorationist seeks to locate and then....
American. Law of Mining § 1.03[1], at 1-41 (Rocky Mtn. Min. L. Found, ed., 1994).
It follows that the protections provided for in section .130 apply to staking activities exercised under the rights granted pursuant to section .125(a) (for.a right reserved under section .125(a) may not be exercised until the indemnification provisions of section .130 are satisfied). Additionally, the staking of a private landowner's surface estate without making a good faith effort to reach an indemnification agreement constitutes a violation of 11 AAC 96.140(10).
Lastly, I disagree with the court’s observation that the superior court inappropriately fashioned an ejectment remedy for Hayes's violations of section .130 and 11 AAC 96.140(10). In my view the superior court’s remedy was appropriate given the rights accorded the surface estate owners under section .130 and 11 AAC 96.140(10).