908 F.3d 437
9th Cir.2018Background
- In 2006–2013 the Murrays (surface owners) discovered several rare, valuable dinosaur fossils on ranch land previously owned in part by the Seversons, including the "Dueling Dinosaurs" and an almost-complete T. rex. The fossils are appraised at millions of dollars.
- In 2005 the Seversons sold their surface rights and one-third of the mineral estate to the Murrays but expressly reserved the remaining mineral estate (deed reserved "all right title and interest in and to all of the oil, gas, hydrocarbons, and minerals in, on and under").
- The Murrays claimed the fossils belong to the surface estate (i.e., to them). The Seversons counterclaimed that the fossils are "minerals" under the reserved mineral estate and thus majority-owned by the Seversons.
- Experts agreed bones/fossils are composed of inorganic minerals (hydroxylapatite and/or francolite) but disputed precise mineralogy; parties did not dispute fossils are mineralogical in the scientific sense.
- District court granted summary judgment for the Murrays, holding dinosaur fossils are not "minerals" in the ordinary and natural sense under Montana law; the Ninth Circuit reversed and remanded, holding the fossils qualify as "minerals" under Montana's adopted Heinatz/Farley test.
Issues
| Issue | Plaintiff's Argument (Murray) | Defendant's Argument (Severson) | Held |
|---|---|---|---|
| Whether the deed term "minerals" includes dinosaur fossils found on the property | "Minerals" in ordinary and natural meaning covers substances extracted for refinement/use (oil, coal, ore), not fossils; many statutes and regs distinguish fossils from minerals; fossils' value derives from being specimens, not mineral composition | Fossils are scientifically composed of minerals and the Farley/Heinatz test asks whether a substance that is mineral in the scientific sense is "rare and exceptional or possess[es] peculiar property giving special value" — which these fossils satisfy | Reversed district court: under Montana law (following Heinatz/Farley), fossils that are mineral in scientific sense and are rare/exceptional with special value fall within "minerals" in a mineral reservation; these Montana Fossils qualify |
| Whether the Heinatz/Farley "rare and exceptional / special value" test is categorical (applies to an entire class) or specimen-specific | Must be categorical — a whole class (e.g., all dinosaur fossils) must qualify, otherwise unworkable and unpredictable | Test is non-categorical; specific specimens can qualify if they are rare/exceptional and possess special value | Held non-categorical: specimen-level rarity/value controls; the Montana Fossils meet the test |
| Whether statutory and dictionary definitions displace the Farley/Heinatz approach | Statutory/dictionary definitions show fossils are not within ordinary "minerals" for deed interpretation; some Montana statutes/regulations list fossils separately | Statutes and dictionaries are inconsistent; many statutory definitions encompass fossils; Farley remains controlling for deeds under Montana law | Held that statutory/dictionary materials are inconclusive and Farley/Heinatz governs deed interpretation |
| Whether adopting the Heinatz/Farley test produces absurd or unworkable results (policy concerns) | Test creates uncertainty, litigation, and risks to museums/collecting; courts should avoid such outcomes | Test aligns with parties' intent in mineral conveyances (value-based definition) and is manageable given broad conception of "value" | Court rejects policy objections as matters for Montana lawmakers/courts; applies Farley/Heinatz despite theoretical concerns |
Key Cases Cited
- Farley v. Booth Brothers Land & Livestock Co., 890 P.2d 377 (Mont. 1995) (adopts Heinatz-style test for whether a substance is a "mineral" in deed disputes)
- Heinatz v. Allen, 217 S.W.2d 994 (Tex. 1949) (test focusing on ordinary and natural meaning: scientific mineral substances qualify only if rare/exceptional or possess special value)
- Hart v. Craig, 216 P.3d 197 (Mont. 2009) (Montana Supreme Court applied Heinatz/Farley factors in a subsequent mineral-reservation dispute)
- N. Pac. Ry. Co. v. Soderberg, 188 U.S. 526 (1903) (observing the word "mineral" has many contextual meanings and ordinary definitions may be unhelpful)
- Holland v. Dolese Co., 540 P.2d 549 (Okla. 1975) (quoted in Heinatz/Farley framework regarding when common substances qualify as minerals)