WALTER B. FREEMAN, RNR RESOURCES, LLC, MICHELLE L. HARRIS, SANDRA LEE FINCHER, JAMES R. OMUNDSON, Plaintiffs-Appellants v. UNITED STATES, Defendant-Appellee
2016-2694
United States Court of Appeals for the Federal Circuit
November 3, 2017
Appeal from the United States Court of Federal Claims in No. 1:01-cv-00039-NBF, Senior Judge Nancy B. Firestone.
RICHARD MERRITT STEPHENS, Stephens & Klinge LLP, Bellevue, WA, argued for plaintiffs-appellants.
AVI KUPFER, Appellate Section, Environment and Natural Resources Division, United States Department of Justice, Washington, DC, argued for defendant-appellee. Also represented by JEFFREY H. WOOD.
Before PROST, Chief Judge, WALLACH and STOLL, Circuit Judges.
Appellants Walter B. Freeman, RNR Resources, LLC (RNR), Michelle L. Harris, Sandra Lee Fincher, and James R. Omundson (collectively, Appellants) sued Appеllee the United States (the Government), alleging, inter alia, a regulatory taking of RNR‘s mining claims by the Government. The U.S. Court of Federal Claims granted the Government‘s motion to dismiss Appellants’ regulatory taking claim for lack of subject matter jurisdiction because the claim was not ripe. Freeman v. United States (Freeman I), 124 Fed. Cl. 1, 2 (2015); see Freeman v. United States (Freeman II), No. 01-39L, 2016 WL 943859, at *1 (Fed. Cl. Mar. 1, 2016) (denying reconsideration). Appellants appealed. We have jurisdiction pursuant to
BACKGROUND
RNR, which is solely owned by Mr. Freeman,1 located eight mining claims on public lands of the Rogue River Siskiyou National Forest. See J.A. 41–42. In 2011, RNR filed a plan of operations (the Plan) with the U.S. Forest Service (Forest Service) to authorize commercial mining of the[se] new mining claims as required by regulation.2 J.A. 42; see J.A. 245. The Plan describes a project to mine ore that contains commercially recoverable amounts of nickel, chromium[,] and iron from two deposits over the course of thirty years. J.A. 269; see J.A. 251. In order to haul the mined and screened ore to a processing site, RNR proposed сonstruction of nearly eight miles of new roads, excavation of a pit for water storage, and construction of two crossings over a creek. J.A. 270–71. RNR also proposed the creation of a processing facility on an approximately [twenty] acre site, J.A. 271; see J.A. 264 (map with location of facility), which was to be located on lands managed by the U.S. Department of the Interior‘s Bureau of Land Management (BLM), J.A. 105.
After receiving the Plan, District Ranger Roy Bergstrom directed Area Mining Geologist Kevin Johnson to review the Plan. J.A. 103–04, 154. During two separate telephone conversations that occurred soon after RNR filed the Plan, Mr. Freeman discussed with Messrs. Bergstrom and Johnson the potential of conducting a bulk sample of minerals on his mining claims to collect 10-15 tons of material. J.A. 104; see J.A. 155, 342. During these discussions, Messrs. Bergstrom and Johnson eventually advised Mr. Freeman to submit a written proposal of the bulk sampling to include in the Plan. J.A. 104, 155.
In March 2012, Mr. Johnson sent a memorandum to Mr. Bergstrom with his assessment of the Plan. See J.A. 291-93. Mr. Johnson understood that Mr. Freeman planned to build a full-production processing facility that would include, inter alia, a rotary kiln, three...ore storage buildings, a furnace/metal processing building, and a supply storage building. J.A. 291. Mr. Johnson, however, noted that the BLM office had not received a plan of operation from Mr. Freeman for the construction of [this full-production] processing facility, despite the Plan‘s proposal to construct the processing facility on BLM-managed lands.3 J.A. 292; see J.A. 242 (explaining that Mr. Johnson checked with the BLM every one to two months about the status of Mr. Freeman‘s BLM plan of operations). Mr. Johnson also indicated that the Plan did not include a discussion of the operator owning or obtaining a water right for the operating facility. J.A. 292. He explained that RNR would need to construct a pilot-prototype plant,4 which he identified as a standard practice in the mining industry. J.A. 292. According to Mr. Johnson, a pilot-prototype plant would allow Mr. Freeman to determine economic feasibility, evaluate treatment and disposal of waste, and identify the best potential product to be processed. J.A. 292–93. Therefore, Mr. Johnson concluded:
[The Plan] is not reasonable and does not represent the next logical or sequential step in the development of this deposit in a mine of this size and scope. I recommend that the [Plan] be returned to Mr. Freeman with the suggestion that he submit a proposal for bulk sampling and construction of a pilot-prototype plant that can process the bulk sample so that it can be determined if production scaled mining and smelting is feasible.
J.A. 293 (emphasis added).
In July 2012, Mr. Bergstrom sent Mr. Frеeman a letter containing the Forest Service‘s written response to the Plan and attached Mr. Johnson‘s memorandum. J.A. 294-95. Mr. Bergstrom specifically explained that the Plan will not be processed until [Mr. Freeman] provide[s] additional information and changes to the [P]lan as outlined in Mr. Johnson‘s memorandum. J.A. 294 (emphases added). The letter highlighted the lack of a pilot-prototype plant and Mr. Freeman‘s failure to submit a companion plan to the BLM for construсtion of a full-production processing facility. J.A. 294. Mr. Bergstrom requested Mr. Freeman reconsider [his] proposal, submit a new plan . . . with more detail, and provide confirmation that [he] ha[s] submitted a plan to the BLM. J.A. 295.
During a meeting in September 2012 to discuss next steps in light of the July 2012 letter, Messrs. Bergstrom and Johnson reiterated the need for a pilot-prototype plant. J.A. 249; see J.A. 337. Although Mr. Freeman asked Messrs. Bergstrom and Johnson to tell him how large a sample
Thereafter, Mr. Bergstrom requested more specific information from Mr. Johnson related to comments made by Mr. Freeman during this meeting. J.A. 310. In response, Mr. Johnson prepared a second memorandum in June 2013. J.A. 310–19. Mr. Bergstrom sent a letter with Mr. Johnson‘s latest memorandum to Mr. Freeman. J.A. 320. Mr. Bergstrom noted that there were a number of items that are insufficient in the Plan, and listed some new and previously-identified deficiencies, such as information on air and water quality, solid waste, scenic values, fisheries and wildlife habitat, and roads. J.A. 320. He reiterated that RNR still needed to submit a plan to the BLM for the full-production processing facility. See J.A. 320 (mentioning that, [b]ased on recent studies, the proposed processing facility may have some technical issues that may make it currently not feasible). To date, RNR has not responded to the Forest Service‘s requests for additional information, including the submission of a bulk sampling proposal, the dеvelopment of a pilot-prototype plant, or the filing of a plan of operations with the BLM for the construction of a full-production processing facility. See Oral Arg. at 14:00–30, http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2016-2694.mp3; J.A. 297.
Instead of providing any of this additional information, Appellants sued the Government, alleging, inter alia, a regulatory taking of RNR‘s mining claims.5
J.A. 33, 47-48. The Government moved to dismiss for lack of subject matter jurisdiction. See Freeman I, 124 Fed. Cl. at 1. Appellants filed a motion for AUTHORIZATION OF DISCOVERY, J.A. 491 (capitalization mоdified), which the Court of Federal Claims denied, J.A. 68. The Court of Federal Claims granted the Government‘s Motion to Dismiss RNR‘s claim as unripe, Freeman I, 124 Fed. Cl. at 2, and denied Appellants’ motion for reconsideration, Freeman II, 2016 WL 943859, at *1.
DISCUSSION
I. Standard of Review and Legal Standard
We review de novo the Court of Federal Claims’ dismissal of a claim as unripe. Barlow & Haun, Inc. v. United States, 805 F.3d 1049, 1054 (Fed. Cir. 2015). We review underlying factual findings by the Court of Federal Claims for clear error. Id. When, as here, a motion to dismiss challenges the truth of the jurisdictional facts, the Court of Federal Claims may consider relevant evidence in order to resolve the factual dispute. Banks v. United States, 741 F.3d 1268, 1277 (Fed. Cir. 2014) (internal quotation marks and citation omitted). In such
The Fifth Amendment prohibits the Government from taking private property for public use, without just compensation.
A failure to secure a final decision may be excused under the futility exception, where [an] agency‘s decision makes clear that pursuing remaining administrative remedies will not result in a different outcome. Morris v. United States, 392 F.3d 1372, 1376 (Fed. Cir. 2004). Indeed, Government authorities may not burden property by imposition of repetitive or unfair land-use procedures in order to avoid a final decision. Palazzolo, 533 U.S. at 621. The private party, however, must first follow reasonable and necessary steps to allow regulatory agencies to exercise their full discretion. Id. at 620.
II. RNR‘s Regulatory Taking Claim Is Not Ripe for Review
The Court of Federal Claims determined that Appellants’ claim was not ripe because: (1) the Forest Service had not issued a final decision regarding the Plan; and (2) the futility exception did not apply. Freeman I, 124 Fed. Cl. at 7-9. Appellants challenge both findings on appeal. See Appellants’ Br. 16–26 (addressing the final decision requirement), 38-39 (addressing the futility exception). We address these issues in turn.
A. The Forest Service Has Not Reached a Final Decision
The Forest Service has a process through which private parties may obtain permission to mine. By regulation, the Forest Service requires any person proposing to conduct operations which might cause significant disturbance of surface resources to submit a notice of intent to operate to a District Ranger.
Appellants do not dispute that this regulatory process applies here; indeed, RNR filed the Plan with the Forest Service in accordance with
Tellingly, Appellants concede they never received a notice of a final decision that is appealable as provided in
B. The Futility Exception Does Not Excuse Appellants’ Failure to Secure a Final Decision
Appellants argue, in the alternative, that compliance with the Fоrest Service‘s additional requests would be futile because continuing to pursue the administrative process would not result in a different outcome. Appellants’ Br. 38–39. We are not convinced compliance with those requests would be futile.
Appellants suggest that the Forest Service has an ulterior motive to prevent RNR from mining by moving the goal posts and continuing to find additional deficiencies with the Plan, such that compliance with the requests would not further RNR‘s chances of securing a permit. Appellants’ Br. 39; see Oral Arg. at 3:12–5:32 (discussing concerns with reasonableness of the pilot-prototype plant requirement). Appellants posit that the July 2012 letter amounts to a final decision because the Forest Service‘s guidance on the size and scope of a pilot-prototype plant was vague and therefore unfair, and the creation of such a plant would not have enabled the Forest Service to exercise its full discretion as such а requirement was unreasonable. See Appellants’ Br. 17-18; see also Palazzolo, 533 U.S. at 620. These arguments lack merit.
First, the fact that the Forest Service did not clearly lay out the requirements of a pilot-prototype plant neither renders its request an unfair attempt to avoid a final decision, nor releases RNR from its obligation to comply with that request. The Forest Service indicated that the purpose of creating a pilot-prototype plant was to verify the commercial viability of the Plan. See J.A. 249 (explaining RNR needed to show that it was feasible to ramp up the process to a production capacity), 293 (discussing the need to determine feasibility of production scaled mining and smelting). The Forest Service‘s rejection is reasonably related to its regulations’ purpose of minimiz[ing] adverse environmental impacts of mining operations on National Forest System surface resources.
Second, Appellants do not provide evidence to support their speculation of an ulterior motive by the Forest Service. See generally Appellants’ Br. Appellants’
III. Appellants’ Remaining Arguments Are Unavailing
Appellants also argue that the Court of Federal Claims erred by not allowing discovery of jurisdictional facts, an evidentiary hearing, or deferral of the ripeness inquiry until there could be a trial on the merits. Appellants’ Br. 29–38. We review the Court of Federal Claims’ denial of a discovery request and its evidentiary rulings for an abuse of discretion. See Rick‘s Mushroom Serv., Inc. v. United States, 521 F.3d 1338, 1342 (Fed. Cir. 2008) (requests for discovery); Taylor v. United States, 303 F.3d 1357, 1359 (Fed. Cir. 2002) (evidentiary rulings). There was no abuse of discretion here.
First, the Court of Federal Claims did not abuse its discretion by denying Appellants’ request for discovery. Appellants have failed to point to any legal error in the Court of Federal Claims’ decision. See Appellants’ Br. 29–38. Rather, the Rules of the Court of Federal Claims (RCFC) support the decision to deny discovery. The rules allow for discovery only after the parties have conferred. RCFC 26(d)(1) (2016). That conference typically occurs after the Government files an answer. RCFC App. A ¶ 3. Neither the filing of an answer nor a conference had occurred here. See J.A. 68; Appellants’ Br. 31. Recognizing this, the Court of Federal Claims denied Appellants’ request for discovery, finding no reason to deviate from the procedure contemplated by the rules. See J.A. 68 (Discovery shall proceed in accordance with the rules.). Appellants have also failed to meet their burden to proffer with sufficient specificity the jurisdictional facts that they believe would have been discovered to change the Court of Federal Claims’ jurisdictional finding. See Oral Arg. at 7:04-23 (Q: What did you specifically ask the Court of Fedеral Claims to let you discover-what
Second, as to the denial of an evidentiary hearing or deferral of the ripeness inquiry until trial, there is no dispute over any facts relevant to ripeness. RNR failed to complete the administrative process to secure a permit. Indeed, before the Court of Federal Claims, Appellants acknowledge[d] that there ‘appears to be no dispute as to what RNR filed, when it was filed, and when or what the Forest Service‘s response was.’ Freeman II, 2016 WL 943859, at *3 (quoting Pl.‘s Reply 3–4, Freeman v. United States, No. 1:01-cv-00039-NBF, ECF No. 209). Accordingly, we find no error with the Court of Federal Claims’ discovery and evidentiary rulings.
CONCLUSION
We have considered Appellants’ remaining arguments and find them unpersuasive. Accordingly, the Final Judgment of the U.S. Court of Federal Claims is
AFFIRMED