Cook v. United StatesCook v. United States
OPINION
This action, brought pursuant to the Tucker Act,
BACKGROUND
The case was transferred to this judge on December 10, 1998. The background facts are discussed in Cook v. United States,
On October 12,1993, Congress enacted the JNRAA which bars BLM from issuing any new patents on land within the Jemez National Recreational Area after May 30, 1991. See
Plaintiffs filed the instant action alleging that the enactment of the JNRAA constituted a taking of vested property interests in the mining patent without just compensation. They have moved for partial summary judgment on the issue of liability, claiming that they acquired equitable title to a mining patent when they complied with all statutory and regulatory requirements and received a final certificate. Defendant filed a cross-motion for summary judgment and a motion to dismiss for failure to state a claim, asserting that plaintiffs had no constitutionally pro-teeted right to a patent because BLM had not yet determined the validity of plaintiffs’ claims.
The court earlier denied defendant’s summary judgment motion, holding that “to the extent plaintiffs ‘complied with all terms and conditions which entitle [them] to a patentfj’ [Benson Mining & Smelting Co. v. Alta Mining & Smelting Co.,
As to Claims nine through twelve, however, the court granted defendant “an opportunity to present evidence demonstrating that plaintiffs failed in other ways to comply with ‘all terms and conditions which entitle [them] to a patent.’” Cook,
DISCUSSION
Defendant argues that plaintiffs do not have a vested right in a mining patent on Claims nine through twelve because they had not fully complied with the patent application requirements of the Mining Act prior tо October 12,1993, the date that Congress enacted the JNRAA. Specifically, it contends that plaintiffs failed to describe a locatable mineral deposit in their application. Defendant asserts that because plaintiffs described their mineral deposit as “block pumice,” they were limited to claiming the block pumice exclusion under the Multiple Use Act. Thus, plaintiffs’ description of and data on the mineral deposits in Claims nine through twelve would not, even if verified, support the discovery of pumice having one dimension of two inches or more. As the following discussion demonstrates, however, defendant’s argument is unavailing.
The Multiple Use Act identifies the types of pumice that are locatable under the Mining Act. It states: “No deposit of common varieties of sand, stone, gravel, pumice, pum-icite, or cinders ... shall be deemed a valuable mineral deposit within the meaning of the mining laws of the United States so as to give effective validity to any mining claim hereafter located under such mining laws----”
“Common varieties” as used in this sub-chapter andsections 601 and 603 of this title does not include deposits of such materials which are valuable because the deposit has some property giving it distinct and special value and does not include so-called “block pumice” which occurs in nature in pieces having one dimension of two inches or more.
Id. In other words, although pumice is presumptively a common variety mineral, and thus non-locatable, under two distinct circumstances it qualifies as a locatable mineral: (1) if it has some property giving it distinct and special value, or, (2) if it is block pumice having one dimension of two inchеs or more.
There is no question that the mineral examination on these four claims revealed the presence of pumice in the first category, i.e., pumice having some property giving it distinct and special value. Defendant argues, however, that because plaintiffs’ application included a reference to the minerals on their claims as “block pumice,” plaintiffs were limited to the block pumice exclusion under
Defendant relies on United States v. Multiple Use, 120 IBLA 63 (1991). Multiple Use filed a patеnt application describing the valuable mineral that it found on its claims as pumice. See id. at 74. The Forest Service issued a mining claim contest complaint alleging that Multiple Use’s claims were invalid because they were located for a mineral designated as “common variety” under
In a footnote, the IBLA stated: “[throughout the hearing witnesses for Multiple Use referred to any pumice having a dimension in excess of one inch as block pumice. The Common Varieties Act,
Nothing in the Multiple Use Act or the Mining Act defines the phrase “block pumice” or limits its use in patent applications to pumice having one dimension of two inches or more.
The second element of defendant’s argument — that because plaintiffs based their claims on the discovery of “block pumice” having one dimension of two inches or more, they failed to properly describe a beatable mineral on Claims nine through twelve — thus fails. The fact that plaintiffs’ application contains no data, such as gram-size measurements, on Claims nine through twelve which, if verified, would demonstrate the discovery of pumice having one dimension of two inches or more is therefore not fatal, so long as the first exception was propеrly invoked. It was.
As evidenced throughout their application, plaintiffs based their claims on the discovery of the other type of beatable pumice — pumice having some property giving it distinct and special value. Thus, the pertinent issue is whether plaintiffs’ application properly described that type of beatable mineral.
BLM regulations require patent applicants to file a narrative statement describing the mineral found and data supporting the claim, which the Government may use in conducting field examinations to verify the claims:
At the time the prоof of posting is filed the claimant must file in duplicate an application for a patent showing that he has the possessory right to the claim, in virtue of a compliance by himself (and by his grantors ...) with the mining rules, regulations, and customs of the mining district or State in which the claim lies, and with the mining laws of Congress, such statement to narrate briefly, but as clearly as possible, the facts constituting such compliance, the origin of his possession, and the basis of his claim to a patent____The showing in these regards should contain sufficient data to enable representatives of the Government to confirm the same by examination in the field and also enable the Bureau of Land Management to determine whether a valuable deposit of mineral actually exists within the limits of each of the locations embraced in the application.
Common variety minerals do not qualify as valuable because they “do not possess a distinct, special eсonomic value for such use over and above the normal uses of the general run of such deposits.”
The American Law of Mining recites that “[t]he extent of information which must be initially submitted with a patent application is not settled.” 2 American Law of Mining, § 51.07[8] at 51-49 (2d ed.1996). Patent applications, however, “should contain, in detail, such data as will support the claim that the land applied for is placer ground containing valuable mineral deposits____”
Plaintiffs’ application for Claims nine through twelve properly describes a locatable mineral deposit. It demonstrates that they based their claims on the discovery of unique pumice that is more valuable than ordinary pumice due to its distinct purity, size, and color. For example, in their application plaintiffs state:
Block pumice was erupted from the El Cajete vent in a series of eruptions, at least 10 or more in number, over a relatively short period of time. Little or no erosion or weathering occurred between eruptions so that the pumice shows little discoloration, and no deterioration.
The base of the El Cajete pumice deposit is irregular; it is sometimes marked by a thin surge deposit, sometimes by a thin clay-rich layer from a few inches to a few feet thick, and sometimes the block pumice rests directly on the rhyolite with nо material in between. The unique quality of the pumice is evidenced by its remarkable purity; the average number of lithic fragments is probably less than 20% of the total mass and some exposures contain less that 1% lithic impurities. Because there was little time between eruptive events little or no weathering or erosion took place in the deposit. As soon as the pumice dries out it is uniformly white and contains almost no staining or discoloration.
... The “Pumice Grain Size” measurements shown on the diagrams forming Exhibit “T”, attached hereto and incorporated herein by reference indicate an average block content (blocks greater that S/U" in diameter) of over 50%, demonstrating the uniqueness of the deposit. Ordinary pumice generally contains less than 5% block pumice. In additions, an extraordinarily high percentage of the blocks are actually in excess of 2", again demonstrating the uniqueness of this deposit.
The block pumice is distributed very uniformly throughout the claims and represents over 50% of the material on average and locally is far more abundant (over 90% in some cases). From a commercial point of view this distribution is extremely valuable and coupled with the purity and lack of discoloration in muсh of the section enhances the uniqueness of the deposit.
From the processing plant the material is sold FOB to consumers. The principle specifications which must be met by the producer are uniform white color, strict size limits, and a supply sufficient to meet demand.
The block pumice discovered by Applicants on each claim is of sufficient quality*793 and quantity to show present marketability at a profit. Block pumice is currently in demand for fabric treatment, landscaping, and manufacturing purposes. Mining operations conducted by Applicants’ lessee at the Los Conchas Mine, which are at a pilot test stage and not yet at full capacity, currently generate royalties to Applicants based on a gross profit in excess of $5,000.00 per week. Full production at Los Conchas Mine alone, which is planned throughout 1990 and beyond pursuant to the schedule set forth in the 1989 Plan of Operations, will generate royalties based upon a gross profit in excess of $29,000.00 per week.
Market demand for block pumice is increasing steadily, and demand in the United states far exceeds domestic supply.... The demand for the pumice in question is particularly high due to its purity and size.
Plaintiffs’ Pаtent Application (“Application”) at 23, 24, 28, 31, 34, 37, and 38 (emphasis added). These excerpts demonstrate that plaintiffs intended to base their mining claims on the discovery of a mineral that they call “block pumice” which is “unique” because of its size, purity, and lack of discoloration or staining qualities, and because it is valuable and marketable. This is more than sufficient to claim discovery of a locatable mineral under the Multiple Use Act.
Plaintiffs’ application included a forty-page sworn statement which describes the kind, nature, and extent of their mineral discovery, nаrrates facts relating to the basis for their claim, and includes verifiable data showing the existence of a valuable mineral deposit as required by the BLM’s patent application regulations. See
Plaintiffs referred to Exhibit W of their application, which indicates the mining costs and profits of their pilot test and the estimated costs and profits of future production. Exhibit X contains the sales and production figures for their püot test, and Exhibit Y describes the domestic use and production of pumice. Plaintiffs compared the sales price of the uncommon variety pumice mined from their claims, which ranged from $5.50 to $28.80 per cubic yard, to the appraisal price for common variety pumice, which was $0.25 per cubic yard, demonstrating the special economic value of their pumice deposits.
Defendant’s final argument, drawn from the foUowing dicta in Kitts, 84 IBLA 338 (1985), is that plaintiffs fañed to make a prima facie showing of a valuable mineral discovery:
An applicant has an obligation to support his application for mineral patent with sufficient descriptive information and data to permit the BLM mineral examiner, on review in his office, to conclude that each claim was valid and that aU prerequisites for patent had been met, subject only to confirmation upon field examination. In short, the patent application must make a prima facie showing that he is entitled to the patent he seeks. This is a reasonable requirement because, otherwise, BLM would be obliged to waste the valuable time of its mineral examiners to conduct costly field examinations based upon information which did not even show the patent application to be meritorious on its face.
Id. at 343.
In Kitts, the IBLA affirmed a BLM decision rejecting Kitts’ patent application with
Specificаlly, appellant has provided no meaningful description of the geology on the claims or in the general area; no substantiated description of the quantity and quality of the ore alleged discovered; no description of the discovery points; no description of the samples taken in terms of their location, size, the sampling technique employed, or the means of their evaluation; no description of the workings presently existing on the respective claims, if any; and no description of the $500 in improvements which allegedly have been installed оr constructed for the benefit of each of the claims.
Id. at 342. The IBLA also found that the applicant’s economic analysis was problematic because he failed to ascribe any cost to labor, used an overstated average price for gold, and based his production estimates on a non-typical and unproven production technique. See id. Based on the absence of a mineral survey and the other information described above, the IBLA affirmed BLM’s decision rejecting the application. See id. at 343.
The instant case is factually distinct. In Kitts, the IB LA’s description of the deficiencies in Kitts’ application reads as a virtual index of the information plaintiffs here submitted with their application. For example, unlike the application in Kitts, plaintiffs described the geology of the land encompassing their claims in detail and included a narrative on the origin and geological history of their discovery.
The сourt, in any event, has misgivings about the statement in Kitts that applicants must submit data sufficient “to permit the BLM mineral examiner, on review in his office, to conclude that each claim was valid and that all prerequisites for patent had been met----” Kitts, 84 IBLA at 343 (emphasis added). It is at odds with
There being no other showing by defendant that plaintiffs failed to comply with the terms and conditions entitling them to a patent, and in view of the court’s prior decision that compliance with the terms and conditions of a patent gives rise to a vested property right, it is undisputed that the passage of the JNRAA destroyed plaintiffs’ property right and did so without compensation. It follows that plaintiffs’ motion for summary judgment as to liability must be granted.
CONCLUSION
For the foregoing reasons, plaintiffs’ motion for partial summary judgment is granted. On or before February 12, 1999, the parties shall file a joint status report proposing a schedule for resolving the issue of compensation, including proposed dates for discovery cutoff and the filing of pre-trial materials, as well as the date and location of trial. Trial should conclude no later than October 29,1999.
Notes
. The JNRAA requires the Secretary of Agriculture to conduct mineral examinations of all un-patented mining claims within the Jemez National Recreational Area, including those for which a patent application had been filed, within three years of October 12, 1993. See
. Exhibit U is a letter from Bob Crostic of the Jemez District Recreation and Lands staff, quoting the appraisal price from common variety pumice as of August 15, 1989. Exhibit W contains the sales prices for pumice mined from the pilot mine on plaintiffs’ claims.
. Their application explains the origin of the pumice deposit, as follows:
The massive block pumice deposit underlying Applicants' Claims was erupted as one of the most recent events in the development of the present Jemez Caldera. The pumice is derived from a small crater called El Cajete in the moat zone of the caldera and ... was deposited in an arcuate pattern covering an area primarily south and west of the crater.... (Application at 21.)
. Because BLM rejected Kitts’ application for failing to submit a survey and for deficiencies in information and data supporting Kitts’ claim, it is unclear whether Kitts is at odds with Brattain. In United States Steel Corp., 52 IBLA 319 (1981), the IBLA observed that BLM must reject an application which is not accompanied by a mineral survey of any unsurveyed land. See id. at 324. One of the primary reasons that BLM rejected Kitts’ application was because Kitts failed to submit a mineral survey. See Kitts, 84 IBLA at 339. In United States Steel, the IBLA stated that BLM сould properly reject a patent application in which applicants failed "to comply with a clear requirement of the regulations relating to the form of the application.” Id. at 324. The IBLA also stated, however, that "it is premature to reject the patent application on the adjudicator’s finding of insufficient evidence of discovery.” Id. at 323. Kitts may be read in conformity with United States Steel assuming Kitts’ application was found to have been so manifestly deficient in information that it represented a failure "to comply with the clear requirement of the regulations relating to the form of the application....” Id. at 324.
. Kitts is also criticized in American Law of Mining, which states:
Dennis J. Kitts states in dicta that the information and data must be sufficient to enable a BLM mineral examiner to conclude "on review in his office ” that a claim is valid and meets the requirement for a patent, apparently including the requirements of a discovery. The opinion goes on to state that a prima facie showing is required. It is not clear that these statements are in accord with prior law or with43 C.F.R. § 3862.1-1 . Nor is it clear what a "prima facie showing” means in the context of a patent application because the term generally is used only in relation to evidentiary burdens in adversarial proceedings.
2 American Law of Mining, § 51.07[8] at 51—49, n. 126.1 (citations omitted).