Court Opinion

ID: 8594753
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:01:49.238551+00
Date Added: 2024-06-11T16:54:50.442496
License: Public Domain

Bennett, Judge,
concurring in part 'and dissenting in part: I concur with that portion of the majority opinion which holds that the Indian Claims Commission did not abuse its discretion in denying the defendant-appellant’s motion to *146consolidate all five dockets discussed in the opinion. I agree, also, that in so holding we do not pass on the correctness of ■the principles enunciated 'by the Commission in Washoe Tribe v. United States, 21 Ind. Cl. Comm. 447 (1969), a case which was not appealed to this court. The troublesome issue of whether 'Indians are entitled to trespass damages prior to the date of extinguishment of aboriginal title is not in proper posture for our consideration at this time. We will doubtless have to face this later because these particular Indians claim over $20,000,000 additional for such trespass. I respectfully dissent from the court’s resolution of the other two issues in the instant case.
The maj ority has agreed with the Commission that September 4, 1886, the date of the final surrender of the Chiricahua Apaches, who at the time were under leadership of Gerónimo in Mexico, marks the date of taking of the Chiricahua lands in New Mexico and Arizona. The majority, however, states:
Were we to rule upon the merits of appellant’s claim that the date of taldng is not supported by substantial evidence, we might agree on the present record. The record could be said, to establish that Indian title was extinguished before September 4, 1886, when the Act of August 15,1876,19 St at. 176,195, was passed. Congress may extinguish 'Indian title by a “clear and plain indication” in the public records that the sovereign “intended to extinguish all of the [claimants’] rights” in their property. [Citations omitted.] The Act, applying to the “Apaches of Arizona and New Mexico”, commanded that the “Commissioner of Indian Affairs shall direct that said Indians shall not be allowed to leave their proper reservations”, the effect of which was intended to confine the ancestors of appellees to a reservation wholly outside the aboriginal title area. [Footnote omitted.]
Without belaboring the point, the record is clear that the 1886 date is indeed unrealistic because when Gerónimo surrendered he wasn’t even in the United States occupying the claimed lands and, had he been, his small band of 38 Indians, 24 men and 14 women and children, who surrendered, could hardly, in all reason, be said to have been maintaining exclusive use and control over 15,606,387 acres of claimed aboriginal lands. To the contrary, the Commission discloses *147that in 1886 there were 26,000 white settlers on the lands with their numerous towns and settlements, and the area was traversed by two railroads and telegraph facilities. There were 425,000 head of cattle grazing on the subject tract. Further, the petition in Docket No. 30 alleged that Congress, by the Act of July 22, 1854, 10 Stat. 308, and other acts, opened the Chiricahua lands to homesteading, settlement, and pre-emption. The petition in Docket No. 182 (which was not consolidated here) demanded an accounting back to February 1848. Appellant here contends that the taking could have been no later than 1872 when, as a physical fact, the Chiricahua Apaches no longer had exclusive and continuous use and control of their aboriginal title area, and, as a matter of official Government policy, were confined to reservations, which policy was enforced by the United States Army and a special Indian police force, thus extinguishing Indian title under the authority of statute, executive action, and cases cited in appellant’s briefs. It would also appear that there might be several different dates of taking for so many millions of acres because the various 'Indian bands were directed onto reservations at different times. Further, miners, ranchers and farmers are shown to have had possession of the Indian lands at various early dates, thus negating the exclusive use, control and possession necessary to sustain aboriginal title in claimants in 1886. So, it is with very good reason that the majority says that on the present record it might have to agree that the 1886 date of taking found by the Commission is unsupported by substantial evidence. That is probably the understatement of this term of court.
Whatever the correct date of taking might be, however, the majority holds that the appellant has waived any challenge to September 4, 1886, as the date of taking. Appellant took a big gamble at the trial, and in submission of proposed findings, by arguing that there was no taking because there was no title to take and that the Apaches in the claimed area did not constitute a single tribe or band with a cognizable claim. Presumably, the Government thought its legal position would be weakened by contending for an alternate date to 1886, relied upon by claimants. Hindsight suggests that *148tbis was a tactical error, for a judgment against the Government in the net sum oí $16,489,096 resulted, 26 Ind. Cl. Comm. 193,198 (1971), and is now affirmed by the majority opinion. On June 4,1970, the Government filed a motion for a rehearing ,and reconsideration of the valuation date. The motion was denied on August 26,1970. Appellant then, on March 10, 1971, after rejection of its motion to consolidate, for the first time proposed a specific alternate date of title extinguishment.
It is an unhappy situation which now brings this case to us on appeal after trial and rejection of the Government’s legal defense and where now, on a technicality of waiver, the majority says that a judgment exceeding 16 million dollars must be affirmed, although at the same time saying it is probably not based on substantial evidence. Indeed, the decision of the Commission is clearly wrong on the date of taking, and the majority does not say one word to defend this error but, on the other hand, points it up. It is wrong on the facts and it is not supported by substantial evidence, although the appellant did not contest it when this could most conveniently have been done. The decision as to the date is also wrong as a matter of law because the Act of August 15,1876, if not earlier acts, directed that the Indians be confined to reservations outside their alleged aboriginal lands and, thus, deprived them of those lands. This issue should be remanded to the Commission for development of an appropriate record on the date or dates of taking and new findings thereon pursuant to the correct rule of law, namely, extinguishment of title by intent of Congress in establishing reservations, appropriating money, and loss by the Indians of exclusive control and possession of their aboriginal lands. It is a travesty of justice when the court admits that the date is probably wrong and that the record suggests it is not supported by substantial evidence, and 16 million dollars is riding on such error.
As authority for this harsh rule against the sovereign, which has generously consented to be sued, the majority opinion cites a Third Circuit case, Hennesey v. Securities & Exch. Comm'n, 285 F. 2d 511 (3d Cir. 1961). An examination of that case shows that it deals with a different situation. There, *149Hennesey, a minority stockholder, was granted leave to seek review of an SEC order which had followed an extensive administrative hearing and a decision entered after a trial of 27 days over a period of 8 months. Hennesey had been granted permission to participate in those hearings but did not appear nor file exceptions or briefs before the hearing examiner, or before the Commission. The court properly held that Hennesey had not exhausted administrative remedies and cited section 43 (a) of the Investment Company Act of 1940, 54 Stat. 844, 15 U.S.C. § 80a-42(a), which provided:
* * * No objection to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission or unless there were reasonable grounds for failure to do so. * * *. [Emphasis supplied.]
The court also cited the Commission’s Rules of Practice which required that a party preserve objections to an intermediate decision by exceptions.
It is clear that Hennesey, unlike appellant here, was not standing on legal grounds but simply defaulted, without any reasonable grounds for such failure. Appellant here raised its point late, but before the case got to this court. What the majority is really saying is that it is helpless because “there are no decisions of this court dealing with the precise situation presented on this appeal.” I respectfully refer, as an example to the contrary, to the case of Volentine & Littleton v. United States, 136 Ct. Cl. 638, 145 F. Supp. 952 (1956), where the Government counsel, standing on finality of an administrative decision, declined to offer evidence at a trial before a commissioner of the court, but the court concluded that he should have done so and said:
* * * we shall not foreclose it [the Government] from now introducing evidence, if it wishes to do so. It was seeking to obtain a decision on an important legal question and we will not penalize it for having done so. The case is remanded to the commissioner of this court, who will proceed with it in the regular course. [136 Ct. Cl. at 643, 145 F. Supp. at 954-55.]
This court, in its desire to get at the true facts of a case, has not, historically, been hesitant to remand a case for the *150talcing of further evidence before a final judgment. It should not be hesitant now to follow its own precedent, to exercise its discretion, and to send this case back on the issue of the date or dates of taking and damages therefrom. The Indians are entitled to just compensation for the taking, but the Government is entitled to the considered judgment of the court that the date or dates of taking, and the compensation therefor, are factually and legally correct and not based on some procedural technicality or excessive legalism lawyers can appreciate better than the taxpayers to whom an error is an error, and who must foot the bill. The court has not been so strict when the Indians misapprehended what they should have proved. A remand was ordered to give them opportunity to offer further proof in Confederated Salish & Kootenai Tribes v. United States, 189 Ct. Cl. 319, 417 F. 2d 1340 (1969). Can we be less fair now ? Are we to countenance a judicial double standard of justice? All appellant seeks is to receive fair and honorable treatment. Is it to be a one-way street in this court for Indians only ?
The majority opinion is not only based on a finding wrong in fact and law as to the date or dates of taking, but there is grave question about the method of valuation used by the Commission, and which the court affirms, as to mineral lands within the claimed area. The court doesn’t defend the method of valuation very strongly, just as it cannot defend the date of taking. It simply says that it is a “permissible method” and was sanctioned in Tlingit & Haida Indians v. United States, 182 Ct. Cl. 130, 148, 389 F. 2d 778, 790 (1968). I dissent, also, from this complacent treatment of a vital issue involving a multimillion-dollar judgment.
There are some 61 mining properties at issue here, involving about 60,000 acres. The highest and best use of the acreage is agreed to be for mineral production. Expert witnesses were employed by the litigants and, to a large extent, based fair market value of the properties on a capitalization of income which could reasonably have been anticipated therefrom as of September 4,1886. Appellee’s expert rejected the use of comparable sales and relied upon capitalization of future profits it was assumed a mining entrepreneur would make from production from an existing mine or prospective *151profits from a potential mineral area. This was equated by him to total fair market value of a mine as a business operation. Appellant’s expert applied his valuation largely to a royalty which a landowner would have received and used sales data where available. When neither reliable production statistics nor a sales price was at hand, appellant’s expert used a “comparability and interpretation” method where general appraisal factors used in other districts of the region were compared and interpreted. Appellant’s expert valued the 60,000 acres as worth $3,028,265 while appellee’s expert valued the mineral lands to be worth $10,763,478 in 1886. The Commission’s valuation was $6,375,000.
The Commission agreed that it is common practice for a landowner to lease mineral properties for a royalty but rejected this method of valuation in favor of one giving the Indians the entire profits from a mining enterprise although the Chiricahua Apaches of the 19th century had no more mining expertise than the ordinary farmer on whose lands minerals were found. This is a rather startling proposition, one I never encountered in my 23 years as a trial judge, hearing many valuation cases. A passive fee owner is certainly entitled to the fair market value of his property as just compensation for its taking, but under the weight of authority this does not include damages represented by loss of anticipated profits from business which might be conducted on the property by an astute businessman with experience and technical skills. Mitchell v. United States, 267 U.S. 341 (1925); Joslin Mfg. Co. v. Providence, 262 U.S. 668, 675 (1923); Mosca v. United States, 189 Ct. Cl. 283, 290, 417 F. 2d 1382, 1386 (1969), cert. denied, 399 U.S. 911 (1970); and R. J. Widen Co. v. United States, 174 Ct. Cl. 1020, 1029, 357 F. 2d 988, 994 (1966).
Fair market value may be enhanced by 'known mineral deposits and, absent comparable sales, it may be necessary to use a capitalization-of-income approach, although capitalization is an inaccurate method usually resorted to only when all else fails. In any event, conjectural business profits from mining would not be capitalized in preference to the royalty value of the land, by the weight of authority. United States v. Land in Dry Bed of Rosamond Lake, Cal., 143 F. Supp. 314, *152318 (S.D. Cal. 1956); cf. United States v. Whitehurst, 337 F. 2d 765, 772-73 (4th Cir. 1964); United States v. 158.76 Acres of Land, 298 F. 2d 559 (2d Cir. 1962); and United States v. Silver Queen Mining Co., 285 F. 2d 506 (10th Cir. 1960). It is just not reasonable, nor is it just compensation, that passive, primitive landowners, such as appellees, should reap all the hypothetical profits that could be made out of minerals which only expert mining engineers could discover, mine, mill and ship to market, using much capital, labor, and know-how. The mines which accounted for much of the production noted by the experts were large, extensively developed, 'highly capitalized and sophisticated enterprises. The Commission’s rule leaves no incentive to the mining company or the oil company which must put up risk capital to explore and extract, and does so not for the benefit of the landowner but for profit to itself. The Commission’s rule affirmed by the court, if widely adopted, would produce an energy crisis worse than the one we read about today. Exxon and its competitors are not the charitable enterprises the majority would make of the 'Government. Of course, it can safely be assumed, no one would ever apply such an unconventional rule to any but Indian cases. Yet, if we are to equate the landowner and the entrepreneur by eliminating profits to the latter in this case, it must be on clearer authority than the court’s decision in Tlingit & Haida Indians v. United States, supra, which the Commission relies upon, but misreads, and the majority opinion glosses over in three short sentences, without discussion. That case involved several issues with which we are not concerned here, and it was prosecuted under a special jurisdictional act, not the Indian Claims Commission Act on which the instant claim is predicated. However, it did involve a claim for certain gold mines and mineral lands by Indians in Alaska. As to that part of the claim, the court said, in pertinent part:
The value of land includes the fair market value of its mineral content. [Citation omitted.] Mineral value is established by adequate proof of a fair market value indicating that removal of the deposit would be a profitable venture and would not involve exorbitant expense.
Proof either of actual profits from an existing mine or of prospective profits from a potential mineral area establishes the mineral value of the area. The valuation data *153amassed and tbe testimony offered :by plaintiffs do not establish the required factual proof of the mineral area’s prospective profitability which could be translated into a market value for the mineral deposit. Those factors to which a court looks in ascertaining value, which are not proved probable, remain mere speculation and may not be the basis for valuing property. [Citations omitted.]
After consideration of the speculative nature of the mining venture in unexplored mining areas, the absence of any existing production in the area, the cost of development and the removal and transportation of the minerals, the trial commissioner found that the prospective profitability of the venture was not established. In the absence of proof that the venture would be profitable, no fair market value can be found.
Plaintiffs proved the value of mined mineral in those areas for which compensation was awarded, by proof of the value of the ore as a removed and processed commodity. This established that removal was profitable and the fair market value based on the known value of the mineral deposit was determined. * * *. [182 Ct. Cl. at 146-49, 389 F. 2d at 709.]
It is clear from the above that the court did not say that only profits could be used in determining the fair market value of mineral property. It allowed them where not speculative, but was unable to make an award based on prospective profits from undeveloped areas because they were speculative. The court did not equate the landowner and the mining entrepreneur nor eliminate, as the Commission has done, other methods of valuation. The Commission jumped to the wrong conclusion when it determined that this court has approved only capitalization of anticipated future profits as the most probative of valuation methods for mineral lands. The language in Tlingit & Haida is broad, too broad perhaps, and susceptible to misinterpretation. The Commission has misread the case for it does not favor capitalization of future speculative profits over capitalization of a royalty to the landowner. The opinion does not discuss this more generally accepted alternative valuation method on which proof was apparently not offered, as it was here. The capitalized profits projected by the Commission are too speculative. They are based on conclusory findings of prospective profitability on *154unidentified tracts. Only half a dozen mining districts are described out of a total of 61. These cursory findings do not meet the Tlingit & Haida test and should be rejected in favor of a more realistic valuation, even granting the implied thesis of that case that Indians are entitled to a more favorable valuation method than other claimants. The court cannot find the facts about this, but must observe the findings before us to have been based on a mistaken view of the law of valuation even as expanded by the single case relied on by the majority.
In his dissent in Tlingit cfs Haida, Judge Nichols observed, as to the gold mine claims, that it is contrary to most precedent to make a lawful taker pay for an improvement it has itself installed in good faith. He said that it is wrong to base an award on estimates of the unmined minerals in place because this is too speculative. He cited with approval the Commission’s holding in Winnebago Tribe v. United States, 16 Ind. Cl. Comm. 81 (1965), wherein the Commission refused to make a fact-finding speculating on possible profits, after the taking date, from the minerals involved. He said:
As a practical matter, the original proprietors of the soil, however well protected by law and skillfully represented, could not have expected to pocket all or most of the profits from mining on their lands. It is common knowledge that the party who has the capital, the equipment, the know-how, and the access to markets, will always take the lion’s share. The commissioner’s method of valuation here donates these things to the Indians. [182 Ct. Cl. at 153-54, 389 F. 2d at 793.]
Had I been a member of the court at the tim9 and participated in the decision in Tlingit & Haida, I would have agreed with Judge Nichols’ dissent in this case which he has elsewhere described as producing an absurdity, paying the Indians for gold mines they never had. That is what the majority does here for copper and silver mines. Yet, it is not necessary to reverse Tlingit & Haida to reach a proper result here. It is respectfully submitted that the majority should recognize this and not give Tlingit & Haida the restricted meaning attributed to it by the Commission (but not heretofore by the court), which, rejecting all prior precedent, professes an ability to anticipate profits from potential *155mineral areas and bands them over to claimants wlio did not earn them, and from wbom they were not taken. If the valuation method used by the Commission is sometimes, as the majority says, “permissible,” I would say that it is impermissible in the instant case where both its application and result are distorted. Tlingit & Haida teaches that the method it allows should not be employed where the results would be speculative. That fits this case like a glove. I would reverse and remand.
Skelton, Judge, and Nichols, Judge, join in the foregoing concurring and dissenting opinion.