Petition — Andrus v. Charlestone Stone Products Co.

Inu the Supreme Court of the United States

OCTOBER TERM, 1977

Ceci, D, ANDRUS, SECRETARY OF THE

INTERIOR, PETITIONER

Vv.

CHARLESTONE STONE PrRopucts Co., INC.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

WapDE H. McCRER, JR.,

Solicitor General,

JAMES W. MOORMAN,

Acting Assistant Attorney General,

EDMUND B, CLARK,

CARL STRASS,

ANDREW F, WALCH,

LARRY A, Boaas,

Attorneys,

Department of Justice,

Washington, D.C. 20580.

INDEX

Opinions below .......

ESSE on ee See ee

Question presented ...

Statutes involved ra ae

Statement steed Bane Fant hae

Reasons for granting the writ .

STIS Oca ee ee

SEER Parke ane

EIS GES S AE Cae hae nC C

IE cistcheincdtistictaineianiaceae EE AE nes ee ee Oe

(BRE SF RSET AMEE PARR SRIE Mes oe

RSI Ar er et ek ane

CITATIONS

Cases:

Beery, Robert L., 25 IBLA 287 _...

Best v. Humboldt Placer Mining Co., 371

) eee

Portland Cement Co., 295 U.S. 142 .

Cameron v. United States, 252 U.S. 450.

Chessman, William A., 2 L.D. 774

Chrisman v. Miller, 197 U.S. 318 .

Cole v. Ralph, 252 U.S. 286 .

Fuller v. Mountain Sculpture, Ine., 6 Utah

2d 385, 314 P.2d 842 ..............................

Lenning, Charles, 5 L.D. 190 0...

‘Page

ja onwwnwe ww =

14

la

18a

19a

28a

59a

1, 59a

i 4,8, 12

California Oregon Power Co. v. Beaver

9-10

3, 4,8

11

3

3

13

11

Cases—Continued Page

Northern Pacific Railway Co. v. Soderberg,

188 U.S. 526 © hs eae ae

Osborne v. Morton, C.A. 9, No. 72-2290,

decided February 22, 1974... .... 7

Pagosa Springs, 1 L.D. 573 Se Sect 11

Udall v. Tallman, 380 U.S. 1. _ 11-12

United States v, Coleman, 390 U.S. 599 . 3

United States v. lron Silver Mining Co.,

128 U.S. 673 _.. edie 13

Verrue vy. United States, 457 F.2d 1202... 17,8

Statutes:

Act of July 26, 1866, Section 9, 14 Stat.

253, as amended, 30 U.S.C. 51 2,9, 12

Act of July 9, 1870, Section 17, 16 Stat.

218, as amended, 30 U.S.C. 52 2,9, 12,13

Act of May 10, 1872, 17 Stat. 91, as

amended, 30 U.S.C. 22 et seq. —e

Section 1, 30 U.S.C. 22 8, 10, 12

Section 3, 30 U.S.C. 26 14

Section 10, 30 U.S.C, 35 10

Act of July 23, 1955, 69 Stat. 367, as

amended, 30 U.S.C. 601 et seq.:

Section 3, 30 U.S.C, 611 4

Section 4, 30 U.S.C, 612 10

Desert Land Act of 1877, Section 1, 19

Stat. 377, as amended, 43 U.S.C. 321 i)

Miscellaneous:

5 Clark, Waters and Water Rights,

$§ 408.1 (1972) 12

Iu the Supreme Court of the United States

OCTOBER TERM, 1977

No.

Ceci, D. ANDRUS, SECRETARY OF THE

INTERIOR, PETITIONER

Vv.

CHARLESTONE STONE Propucts Co., INc.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

The Solicitor General, on behalf of the Secretary

of the Interior, petitions for a writ of certiorari to

review the judgment of the United States Court of

Appeals for the Ninth Circuit.

OPINIONS BELOW

The opinion of the court of appeals (App. A,

infra, pp. la-17a) is reported at 553 F. 2d 1209. The

district court’s opinion (App. C, infra, pp. 19a-27a) is

not reported. The decision of the Interior Board of

(1)

2

Land Appeals (IBLA) (App. D, infra, pp. 28a-58a)

is reported at 9 IBLA 94,

JURISDICTION

The judgment of the Court of Appeals (App. B,

infra, p. 18a) was entered on May 12, 1977. By or-

der of August 1, 1977, Mr. Justice Rehnquist ex-

tended the time within which to file a petition to and

including September 9, 1977. The jurisdiction of

this Court is invoked under 28 U.S.C. 1254(1).

QUESTION PRESENTED

Whether water is a locatable mineral under the

mining law of 1872.

STATUTES INVOLVED

Section 9 of the Act of July 26, 1866, 14 Stat. 253,

as amended, 30 U.S.C, 51, provides:

Whenever, by priority of possession, rights to

the use of water for mining, agricultural, manu-

facturing, or other purposes have vested and

accrued, and the same are recognized and ac-

knowledged by the local customs, laws, and the

decisions of courts, the possessors and owners

of such vested rights shall be maintained and

protected in the same; * * *.

Section 17 of the Act of July 9, 1870, 16 Stat. 218,

as amended, 30 U.S.C. 52, provides:

All patents granted, or homesteads allowed,

shall be subject to any vested and accrued water

3

rights, or rights to ditches and reservoirs used

in connection with such water rights, as may

have been acquired under or recognized by sec-

tion 51 of this title.

Section 1 of the Act of May 10, 1872, 17 Stat. 91,

as amended, 30 U.S.C. 22, provides:

Except as otherwise provided, all valuable min-

eral deposits in lands belonging to the United

States, both surveyed and unsurveyed, shall be

free and open to exploration and purchase, and

the lands in which they are found to occupation

and purchase, by citizens of the United States and

those who have declared their intention to become

such, under regulations prescribed by law, and ac-

cording to the local customs or rules of miners

in the several mining-districts, so far as the

Same are applicable and not inconsistent with

the laws of the United States.

STATEMENT

Since 1872 the federal mining laws have permitted

citizens to explore, discover and extract valuable min-

erals from the public domain and to secure fee title

to lands containing such discoveries. Act of May 10,

1872, 17 Stat. 91, as amended, 30 U.S.C. 22 et seq;

Cameron v. United States, 252 U.S. 450, 460. The

claimant must establish that he has discovered a valu-

able mineral deposit within the limits of each claim.

Cole v. Ralph, 252 U.S. 286, 295. The test for value is

the “prudent man test,” Chrisman v. Miller, 197 U.S.

313, 322, augmented by the marketability test, United

States v. Coleman, 390 U.S. 599, 602-603. The com-

bined tests require evidence of a mineral deposit of

4

such character that a person of ordinary prudence

would be justified in the further expenditure of time

and money with a reasonable expectation that the

minerals from the claims could be marketed at a

profit. In 1955 Congress withdrew “common variety”

minerals such as sand and gravel from location un-

der the mining laws. Act of July 23, 1955, Section 3,

69 Stat. 368, as amended, 30 U.S.C. 611. Conse-

quently a claimant to a deposit of such minerals must

show that there was a valuable discovery prior to the

1955 withdrawal date, Cameron v. United States, 252

U.S. 450, 462, as well as at the time of the adminis-

trative hearing. Best v. Humboldt Placer Mining Co.,

371 U.S. 334, 336.

The Secretary of the Interior initiated this action

in 1965, contending that each of 25 sand and gravel

placer mining claims near Las Vegas, Nevada, held

by Charlestone Stone Products Co., Inc.,' was invalid

for want of a timely discovery of a valuable mineral

prior to July 23, 1955, the date common .variety

minerals became no longer locatable.’ Following a

The claims were the Charlestone, Charlestune Nos. 1-22,

and Nos. 12A and 13A (App. D, infra, p. 33a). The courts be-

low apparently omitted the Charlestone from their discus-

sion inadvertently, as they refer to only 24 claims, but we

assume that the decisions below apply to the Charlestone as

well. (Although the name on the claims is actually “Charles-

ton,” and both the claims and respondent were so denominated

in the administrative record (see App. D, infra, p. 33a), in the

courts below respondent has used the name “Charlestone,” and

those courts have applied this spelling to the claims as well as

to respondent. We do the same to minimize confusion.)

* Act of July 23, 1955, Section 3, 69 Stat. 368, as amended,

30 U.S.C. 611.

ae eee

5

full hearing, an administrative law judge found that

the sand ane gravel in question were common variety

minerals and that Charlestone had established the

discovery of a valuable mineral by the critical date

only as to claim 10* (see App. D, infra, p. 32a). The

Interior Board of Land Appeals affirmed (App. D,

infra, p. 58a).

The United States District Court for the District

of Nevada reversed, holding that (1) the testimony

of the Secretary’s only witness, an expert mining

engineer, should not have been credited by the agency

on the issue of marketability, since he was not per-

sonally conversant in 1955 with the local market for

sand and gravel from the claims, and (2) the suc-

cessful drilling of a water well on claim 22 in 1962

and the leasing of claims 1-16 in 1964 at a minimum

annual royalty of $12,000 were substantial evidence

that material could have been extracted from these

claims at a profit prior to July 23, 1955 (App. C,

infra, pp. 20a-2la, 24a). Accordingly, “at least”

* The administrative law judge also held claim 9 valid as a

reasonable reserve for claim 10, but the IBLA reversed be-

cause there was no independent evidence of marketability

regarding claim 9 (App. D, infra, pp. 52a-53a).

The administrative law judge found that claims 12A and

138A, which were located after the effective date of the Act

of July 23, 1955, were void ab initio (App. D, infra, pp. 33a,

49a). These findings were affirmed by the Interior Board of

Land Appeals and by the district court (App. D, infra, p. 49a;

App. C, infra, p. 25a). Charlestone acknowledged in the court

of appeals that the materials on its claims were common varie-

ties and that claims 12A and 13A were therefore invalid

(App. A, infra, p. 2a n. 1).

6

claims 1-16 were valid, and access to the water

Charlestone had discovered on claim 22 should be per-

mitted (App. C, infra, p. 26a).*

The court of appeals affirmed with one significant

addition: it held that claim 22 was also valid, be-

cause Charlestone’s well was evidence of its dis-

covery of water, which the court concluded was a

locatable mineral. The parties had neither briefed

nor argued this question. The court stated that

“Cslince early times, water has been regarded as

a mineral,” and observed that the federal mining

statutes which allow the location of placer claims

“do not expressly define water as a non-mineral”’

(App. A, infra, pp. 15a-16a). Because “the successful

recovery of many ‘hard’ minerals from the earth

and the utilization of the soft mineral of water there-

with go hand in hand,” the court declined to assume

“that Congress was not aware of the necessary glove

of water for the hand of mining * * * [or that]

Congress impliedly intended to reserve water from

those minerals allowed to be located and recovered”

(App. A, infra, p. 16a). The court noted that water

was not named as one of the common varieties of min-

erals that were withdrawn from location as of July 23,

1955, so “it is of no importance that the discovery

of water within Claim 22 occurred after” that date

(App. A, infra, pp. 16a-17a). The water on claim 22

‘The district court offered no legal basis for authorizing

access to the water on claim 22, and we are aware of none

under federal law. We have no way of knowing whether

Charlestone might be able to establish the right to use that

water under state law. See pp. 8-10, infra.

ast”

ed

7

“undeniably has an intrinsic value in the desert area,”

although there was “no evidence of a profitable market

of the water per se for either domestic or irrigation

uses” (App. A, infra, p. 17a). Since the water could

be used to wash the sand and gravel from Charle-

stone’s other claims, and there was a profitable

market for washed sand and gravel, the court held

that “Charlestone has shown a profitable market for

the water recovered upon Claim 22 and its claim for

aa of that water is valid” (App. A, infra,

p. 17a).

REASONS FOR GRANTING THE WRIT

The decision of the court of appeals announces the

startling conclusion that water is a mineral for which

claims to public lands may be located and perfected

under the federal mining laws. This pronouncement

disregards all the precedents of this Court and the

administrative tribunals. It is also contrary to the

applicable statutes, in which Congress has made clear

its intention that acquisition of water rights on public

lands is to be governed by state and local laws, not

by the federal mining laws.’

* The decision below is erroneous in another respect. This

is one of a series of mining cases in which the Ninth Circuit

Court of Appeals, and district courts under its authority, have

been upholding mining claims by reweighing the evidence and

substituting their judgment for that of the administrative

tribunals of the Department of the Interior. See Verrue v.

United States, 457 F.2d 1202 (C.A. 9); Osborne v. Morton

C.A. 9, No. 72-2290, decided February 22, 1974 (unreported).

manding to the district court “to review the administrative

record and reasses$the factual conclusion of the Secretary of

8

In 1866, in the first mining law that opened “min-

eral lands” owned by the federal government for

exploration and occupation, Congress declared that

the Interior concerning the value of the mineral deposit in the

light of Verrue v. United States * * *”). Thus, the court of

appeals here rejected the testimony of the government’s sole

witness, Fisher, a mining engineer (App. A, infra, p. 7a), in

part on the ground, following Verrue, that his opinion was

“unfounded” because he did not have “personal knowledge of

the sand and gravel market” in the relevant locality at the

crucial date of July 1955 (App. A, infra, p. 1la). The court

also declared Fisher’s testimony to be “flatly contradicted” by

other evidence (App. A, infra, p. 11a), an appraisal quite dif-

ferent from the judgment the Interior Board of Land Appeals

reached (App. D, infra, pp. 41a-46a, 58a-58a). Further, while

acknowledging that it was the claimant’s burden to establish

“Ta] discovery of a valuable deposit of sand and gravel on each

of its claims” (App. A, infra, p. 3a), the court of appeals,

like the district court, did not examine the evidence to deter-

mine the development of each particular claim, but lumped it

together and considered it applicable to all the claims—an

approach whereby, as the IBLA noted (App. D, infra, p. 40a),

“a person could locate an entire desert and establish its mar-

ketability by selling sand and gravel from a single location.”

See, e.g., Best v. Humboldt Placer Mining Co., 371 U.S. 334,

336. In particular, the court of appeals failed to note that as

to eight or nine of the Charlestone claims, there was no evi-

dence that any sand or gravel had ever been removed (App. D,

infra, p. 53a).

The Ninth Circuit’s standard of judicial review of mining

claim decisions, as exemplified in this case, threatens to ham-

string the Secretary of the Interior in the discharge of his

responsibility to see that only valid mining claims are recog-

nized and that the rights of the public in the public lands

are preserved. See Cameron Vv. United States, 252 U.S. 450,

459-460. While we do not regard the error in this case as

significant enough to warrant seeking review on this ground,

we have noted it because, if the trend of decisions it illustrates

continues, we may ask the Court to review the issue in another

case.

eT

ee

9

rights which were acquired “by priority of possession”

to the use of water on those lands, and which were

“recognized and acknowledged by the local customs,

laws, and the decisions of courts,” were to be “main-

tained and protected.” Section 9 of the Act of July

26, 1866, 14 Stat. 253, as amended, 30 U.S.C. 51.

And Section 17 of the Act of July 9, 1870, 16 Stat. 218,

as amended, 30 U.S.C. 52, provided that all patents

and homesteads on public lands “shall be subject to

any vested and accrued water rights” acquired or

recognized under the 1866 law. The Act of May 10,

1872, 17 Stat. 91, as amended, 30 U.S.C. 22 et seq.,

which remains the basic law relating to mineral claims,

superseded portions of the earlier acts but left these

water rights provisions unchanged. As this Court

concluded in California Oregon Power Co. v. Beaver

Portland Cement Co., 295 U.S. 142, 155:

The effect of these acts is not limited to rights

acquired before 1866. They reach into the fu-

ture as well, and approve and confirm the policy

of appropriation for a beneficial use, as recog-

nized by local rules and customs, and the legisla-

tion and judicial decisions of the arid-land states,

as the test and measure of private rights in and

to the non-navigable waters on the public domain.

The Court in that case also considered the effect

of Section 1 of the Desert Land Act of 1877, 19

Stat. 377, as amended, 43 U.S.C. 321, and stated

(295 U.S. at 162):

The fair construction of the provision now under

review is that Congress intended to establish the

10

rule that for the future the land should be

patented separately; and that all non-navigable

waters thereon should be reserved for the use of

the public under the laws of the states and ter-

ritories named. The words that the water of

all sources of water supply upon the public lands

and not navigable “shall remain and be held free

for the appropriation and use of the public” are

not susceptible of any other construction. The

only exception made is that in favor of ewisting

rights; and the only rule spoken of is that of ap-

propriation. It is hard to see how a more definite

intention to sever the land and water could be

evinced. The terms of the statute, thus con-

strued, must be read into every patent there-

after issued, with the same force as though ex-

pressly incorporated therein, with the result that

the grantee will take the legal title to the land

conveyed, and such title, and only such title, to

the flowing waters thereon as shall be fixed or

acknowledged by the customs, laws, and judicial

decisions of the state of their location [emphasis

in original].

The court of appeals did not consider any of these

statutory provisions. It merely observed that the min-

“Section 4 of the Act of July 23, 1955, 69 Stat. 368, as

amended, 30 U.S.C. 612, also seems to reflect the congressional

understanding that water is not a mineral under the mining

laws. Section 4 provides that nothing in that Act, which re-

moved common variety minerals from location under 30 U.S.C.

22 and 35,

shall be construed as affecting or intended to affect or in

any way interfere with or modify the laws * * * [of the

western states] relating to the ownership, control, ap-

propriation, use, and distribution of ground or surface

waters within any unpatented mining claim.

11

ing laws did not expressly define water as a non-

mineral (App. A, infra, p. 16a).

The administrative decisions of the Department of

the Interior have consistently held that water is not

a locatable mineral’ and that the acquisition of

water rights is not governed by the federal mining

laws. E.g., Robert L. Beery, 25 IBLA 287; Charles

Lennig, 5 L.D. 190; William A. Chessman, 2 L.D.

774; Pagosa Springs, 1 L.D. 578. After a full re-

view of the prior decisions, the Interior Board of

Land Appeals last year concluded in Robert L. Beery,

which is reprinted as Appendix E, that water could

not now be classified as a locatable mineral “{i|f we

are to pay more than lip service to the doctrine of

stare decisis * * *” (App. E, infra, p. 68a).

The court of appeals failed to note these adminis-

trative authorities. This Court, however, has said

that “great deference” is due to a statutory inter-

pretation adopted by the officers charged with ad-

ministering the land laws. Udall v. Tallman, 380

'This is so although water may be defined as a mineral

for some other purposes. As the IBLA observed in Robert L.

Beery, 25 IBLA 287 (App. E, infra, p. 66a), “[i]f all those

substances which are quite literally ‘minerals,’ such as common

dirt, were locatable under the mining law, there could have

been no entry under the homestead or other agricultural entry

laws, nor any land grants to states and railroads, as all land

would then have been ‘mineral land.’” As this Court recog-

nized in Northern Pacific Railway Co. v. Soderberg, 188 U.S.

526, 530, the broadest definition of the word mineral, as in the

division of matter into animal, vegetable, and mineral, would

be “absurd as applied to a grant of lands, since all lands belong

to the mineral kingdom * * *,”

12

U.S. 1, 16; Best v. Humboldt Placer Mining Co., 371

U.S. 334, 385-336.

The novel holding below, if allowed to stand, will

unsettle the law of water rights throughout the west-

ern states, drawing into question the validity of pri-

vate rights long thought to be established. The rele-

vant provisions of federal law, 30 U.S.C. 51 and 52,

on their face give effect to water rights recognized

and acknowledged under local law. The owner of

water rights established by prior appropriation under

local law normally enjoys the beneficial use of the

water that passes through or under his land. See 5

Clark, Waters and Water Rights, $§ 408.1, 423-424,

443 (1972). But if water is a locatable mineral, it is

presumably possible to perfect a mining claim to the

same water before it reaches the land of the present

user, or, in the case of an underground basin, before

the water is used by whoever presently has the right to

such use.” Since the owner of a mining claim takes

title to the mineral, his claim to the water might be

superior to any preexisting right to the use of the

same water under state law.

To construe 30 U.S.C, 22 as permitting the loca-

tion of a mineral claim to water thus seems to put

that statute in conflict with 30 U.S.C. 51 and 52.

Section 51 states that water rights gained by prior

appropriation and acknowledged under state law are

* While the water on claim 22 was ground water, the court’s

reasoning would appear to apply to water generally, including

aurface water. This is, however, one of the questions raised

and left open by the decision below.

13

to be “maintained and protected.” Section 52 pro-

vides that the grantee of a federal patent takes sub-

ject to preexisting water rights established under

state law—a provision difficult to apply, it would

seem, to a federal patent itself based on a claim to

water as a valuable mineral.

The innovation by the court of appeals thus is likely

to spawn extensive litigation between rival claim-

ants to water rights, under the federal mining laws

on the one hand and state doctrines of prior ap-

propriation on the other.

Moreover, allowing mining claims to a substance

as common and accessible as water—but not one of

the “common variety” minerals withdrawn from lo-

cation by the Act of July 23, 1955—would permit

private acquisitions from the public lands without

the commensurate public gain that results from the

exploitation of substances traditionally classed as

valuable minerals under the mining laws. And since

mining claims, like those in this case, need not specify

the mineral discovered, invalid claims originally

premised on the discovery of some other mineral

could be validated by a showing that water is present

(as the court of appeals did with claim 22 in this

ease.)" Indeed, since the court here relied on the

* The court did not discuss whether water is to be located

as a lode or placer claim. Although this case involved a placer

claim, an argument can be made that water would fall more

logically within the definition of a lode claim. See United

States v. Iron Silver Mining Co., 128 U.S. 673; Fuller v.

Mountain Sculpture, Inc., 6 Utah 2d 885, 814 P.2d 842. In the

case of a lode claim, the claimant normally has the right to

14

intrinsic value of water in a desert region to show

marketability, it may be that any claimant who can

show the presence of water may appropriate public

lands in the arid western states. Such a result would

be contrary to the intention of Congress as expressed

in the Desert Land Act of 1877 and in the other

legislation we have noted.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted.

WaDE H. MCCREE, JR.,

Solicitor General.

JAMES W. MOORMAN,

Acting Assistant Attorney General,

EDMUND B. CLARK,

CARL STRASS,

ANDREW F.. WALCH,

LARRY A. Boaas,

Attorneys.

SEPTEMBER 1977.

follow the vein or the lode outside of his claim. 30 U.S.C. 26.

Thus it might be possible by a single lode claim for a claimant

to gain ownership of all the ground water in a basin or of an

entire stream.

————————————————————— =

ee ee, pa e

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 75-1532

[Filed May 12, 1977]

CHARLESTONE STONE Propucts Co., INC.,

a corporation, PLAINTIFF-APPELLEE

v.

Ceci, D, ANpDRUS, Secretary of the Interior,*

UNITED STATES OF AMERICA,

DEFENDANTS-APPELLANTS

Appeal from the United States District Court

For the District of Nevada

Before: TRASK and GOODWIN, Circuit Judges,

and EAST,** District Judge

EAST, Senior District Judge:

The Cause:

Cecil D. Andrus, for the defendants-appellants, as

Secretary of Interior, (Secretary) appeals the judg-

ment of the District Court holding valid and granting

* Rogers C. B. Morton, as Secretary of Interior, was the

originally named Secretary. We note the name of his present

successor in office.

** Honorable William G. East, Senior United States District

Judge for the District of Oregon, sitting by designation.

2a

access to certain placer sand and gravel mining claims

located in the Las Vegas Valley in Nevada. We af-

firm.

The Secretary of November 17, 1965 initiated a con-

test complaint against the plaintiff-appellee Charle-

stone Stone Products Co., Inc. (Charlestone), attack-

ing the validity of Charlestone’s placer mining

locations for sand and gravel numbered 1 through 22

and numbered 12A and 13A.' The Administrative

Law Judge found Claims 9 and 10 to be valid. On

cross-appeals, however, the Secretary’s Board of Land

Appeals (Board) found only Claim 10 to be valid.

Upon judicial review, the District Court, believing an

injustice had been accomplished, held that “at least

the claims 1 through 16” were valid. It also held that

Charlestone should be granted access to Claim 22 in

order to utilize, in the operations of the valid claims,

the water produced from a well driven on Claim 22.

Issues on Review:

While the Secretary asserts the issues on review in

different terms, we deem the pertinent issues to be:

(1) Whether, upon construing the record as a

whole, the Secretary’s finding that only Claim 10 was

valid is supported by substantial evidence. Multiple

Use, Inc. vy. Morton, 504 F.2d 448, 452 (9th Cir.

1974); White v. Udall, 404 F.2d 334, 335 (9th Cir.

‘Claims numbered 12A and 13A located after the year 1955

are not in issue.

en ————————ee

3a

1968); and Henrikson v. Udall, 350 F.2d 949, 950

(9th Cir. 1965), cert. denied, 384 U.S. 940 (1966).

(2) Whether Charlestone met the two prong test

of establishing: (a) A discovery of a valuable deposit

of sand and gravel on each of its claims; and (b) The

intrinsic value of the sand and gravel deposits was

such as “would justify a person of reasonable pru-

dence in making further expenditures upon the prop-

erty with a reasonable prospect of success in develop-

ing a valuable mine.* United States v. Coleman, 390

U.S. 599... (1968).” Clear Gravel Enterprises, Inc.

v. Keil, 505 F.2d 180 (9th Cir. 1974), cert. denied,

421 U.S. 930 (1975); and Verrue v. United States,

457 F.2d 1202, 1203 (9th Cir. 1972). “The reason-

ably prudent man we are concerned with is the miner

who has made his discovery and not the prospector

who is still looking. Humboldt Placer Mining Co. v.

Secretary of Interior, No. 74-2762, p. 3 (9th Cir.

Jan. 6, 1977).

? That is, whether the sand and gravel “in question could be

extracted, removed and marketed at a profit on. . . July 23,

1955 when common variety sand and grave] deposits as here

involved became no longer locatable. 30 U.S.C. § 611. United

States v. Barrows, 404 F.2d 749 (9th Cir., 1968), cert. denied,

394 U.S. 974... (1969).” Clear Gravel Enterprises, supra at

180-81.

Section 611, in its pertinent parts, reads: “No deposit of

common varieties of sand, stone, gravel . . . 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:

Provided, however, That nothing herein shall affect the valid-

ity of any mining location based upon discovery of some other

mineral occurring in or in association with such a deposit.”

4a

Filing and Operations of Claims:

Pursuant to the existing statute, A. M. Murphy and

Fred Pine (Murphy) filed placer mining claims num-

bered 1 through 22 on February 18, 1942 in a surface

water wash of the Las Vegas Valley some 15 miles

distant from the then center of the city of Las Vegas.

The aggregate acreage of the several claims approxi-

mated 450 acres and contained a later estimated 20

million cubic yards of sand and gravel.

The evidentiary record is replete with eyewitness

testimony that the sand and gravel contained in the

area of the claims was of excellent quality for various

construction uses and had values as such.

Shortly after the location and filing of the claims,

Murphy’s assignee, Southern Nevada Industries, Inc.

(Southern), began operation within the confines of

the claims and removed some 100,000 yards of mate-

rial from a number of places up and down the wash.

Due to the absence of washing water, Southern trans-

ported the raw materials to a site some five miles

distant for crushing, screening, and washing. The

refined material was used in the construction of an

air force base situated northeast of Las Vegas. South-

ern closed the operation in 1943 and moved to an area

near Henderson, Nevada for participation in a World

War II construction project in that area. Thereafter,

during the remainder of World War II and its after-

math, private construction in the area was curtailed.

From September, 1954 until during the year 1957,

one E. H. Brawner (Brawner), as lessee of the

claims, operated under a royalty agreement of not

ee -

5a

less than $200 per month. It is undisputed that at

this time Brawner’s sand and gravel operation was

farther from Las Vegas than were the operations of

his competitors. Brawner’s operation was also ham-

pered to some extent by the absence of a water supply.

Nevertheless he continued to operate the crushing

plant within the limits of Claim 10 and materials

were extracted from the crusher area and “pit” lo-

cated within that claim and from other claims in the

canyon. The market demand for the various types of

sand and gravel, together with the lay of the various

materials, dictated the location of the extractions.

Brawner made profitable sales of the extracted mate-

rials through the year 1957.

The foregoing narration carries the operation on

the claims through the critical pre-July 23, 1955 dis-

covery period.’ The following narration of operations

subsequent to July 23, 1955 is pertinent, first, to the

extent that the facts might bear upon the proper

application, at the time of the contest proceedings, of

the two prong “value” and “prudent man” or market-

' ability test enunciated above; and, secondly, to the

continuity of the marketability of the extracted

materials.

On April 9, 1959, Frank R. Sullivan obtained title

to the claims, extracted materials which were later

stockpiled on the property, and sold some of the mate-

rial as roofing granules.

On January 5, 1960, Charlestone acquired title to

the claims and during 1961 Morrison-Knudsen, Inc.,

* See note 2, supra.

6a

as lessee, entered the claims, constructed a screening

plant within the confines of Claim 10 and carried on

processing operations. Unsuccessful efforts were made

to drill screening water wells within Claims 9 and

10, and in 1962, at the cost of some $3,000, a well

supplying adequate washing water was located within

Claim 22. On July 15, 1964, Charlestone leased

Claims 1 through 16 to Arden Sand and Gravel Co.

(Arden) for a period of five years with an annual

royalty of $12,000. Although Charlestone retained

Claims 17 through 22, it agreed to furnish Arden with

electrical power and washing water from the well

within Claim 22.

Action of the Secretary:

During the summer of 1956 while the Brawner

operations were in progress, the United States Bureau

of Land Management in Nevada employed Messrs.

Hill and Lovejoy (Hill), competent engineers and

surveyors, to investigate the validity of the instant

claims. Hill reported that Claims 1 through 22 en-

compassed a valuable discovery of sand and gravel

deposits and were valid. The report constituted a

comprehensive and informative discussion of the fac-

tors bearing upon a determination of marketability

of sand and gravel deposits and of the quality of

particular sand and gravel deposits as of July 23,

1955. After submission of the Hill report, the Bureau

of Land Management affirmed the validity of the

Brawner claims and removed the area of the claims

from an open small tract classification.

LE a.

7a

Nine years later the Secretary employed Donald

G. Fisher (Fisher) ,* a mining engineer, to investigate

and report on the validity of the Charlestone claims.

Fisher gathered hearsay information from competing

sand and gravel operators in the area and made a

visual examination of the claims in 1965, some ten

years after the crucial date of July 23, 1955. Based

upon his investigation, Fisher opined that all of the

Charlestone claims were invalid for want of a dis-

covery. The Secretary then used the Fisher report

as a basis for the contest proceedings.

Administrative Proceedings:

Fisher was the Secretary’s sole witness and his

testimony comprised the only evidence in support of

the contest. Fisher testified to the effect that his opin-

ion was based upon information gained as a result of

visual examination of apparent extractions from each

of the claims in 1965 and again in 1969; review of all

mineral reports, as well as the Hill report; and inter-

views with local sand and gravel dealers, including

the present owners and the past operators of the

claims. Further, he testified that his opinion was also

based upon his familiarity with the Las Vegas area,

where he had previously been employed by the Gov-

ernment in making validity determinations and mar-

ket studies in mining contest cases. Fisher, using his

version of the test of discovery, opined that “this was

* Fisher had been previously employed by the Secretary in

connection with other contests of sand and gravel claims

within the Las Vegas vicinity.

8a

a very sporadic operation . . . [I]t didn’t appear to be

an operation that could sustain a continuous operation

over the years” and the claims were invalid for want

of discovery. In his opinion, the crucial factors in

the invalidity of the claims were the excessive dis-

stance of the claims from a market and the lack of

washing facilities.

To rebut Fisher’s testimony, Charlestone produced

the deposition testimony of Hill. Hill’s testimony re-

affirmed the conclusion in his 1956 report that all of

the claims were valid. He testified that his opinion

of validity was based upon a personal inspection of the

claims, an investigation of the actual history of the

operation of the claims, and his knowledge of the

marketability of the product resulting from the thor-

ough study he had made in conjunction with Mr.

Lovejoy.

Charlestone buttressed Hill’s conclusions with the

eyewitness testimony of several workers who had been

employed at the extraction operations by Southern

and Brawner.*

The decisions of the Administrative Law Judge and

the Board reflect that each gave substantial weight to

Fisher’s testimony. At the conclusion of the hearing,

the Administrative Law Judge found only two of the

*The record establishes actual sales from the claim sites

and constitutes an even stronger showing of marketability

than was made in either Melluzzo v. Morton, 534 F.2d 860

(9th Cir. 1976), or Verrue, supra. In those cases, this

Court, notwithstanding a total absence of sales from the claim

sites, reversed decisions of the Secretary that certain sand

and gravel claims were invalid.

|

9a

22 claims to be valid. On administrative review, the

Board, placing even more credence on Fisher’s opin-

ion, found only one of the claims to be valid. Char-

lestone ultimately and successfully sought review of

the latter decision in the District Court.

Discussion and Disposition:

Issuc 1:

We conclude that the Board’s exclusion of validity

of Charlestone’s claims, except as to Claim 10, is not

supported by substantial evidence.

Our conclusion is, first, guided by the course set

in Walker v. Mathews, 546 F.2d 814, 818 (9th Cir.

1976):

“Substantial evidence means that a finding is

supported by ‘ “more than a mere scintilla. It

means such relevant evidence as a reasonable

mind might accept as adequate to support a con-

clusion.”’ (Richardson vy. Perales (1971) 402

U.S. 389, 401...) In applying the substantial

evidence test we are obligated to look at the

record as a whole* and not merely at the evi-

dence tending to support a finding.”

Footnote 6 reads:

“See, Day v. Weinberger (9th Cir. 1975) 522

F.2d 1154, 1156 (‘But in determining whether

there is substantial evidence to support the ex-

aminer’s finding a reviewing court must consider

both evidence that supports, and evidence that

detracts from, the examiner’s conclusion. We

cannot affirm the examiner’s conclusion simply

10a

by isolating a specific quantum of supporting evi-

dence.’); Davis, 4 Administrative Law Treatise

§ 29.03 (1958) (‘“. . . Evidence which may be

logically substantial in isolation may be deprived

of much of its character or its claim to credibility

when considered with other evidence.” ’); and

Universal Camera Corp. v. N.L.R.B. (1951) 340

U.S. 474, 487-88 ....”

Secondly, “opinions not supported by facts, and

which are contrary to the physical facts and do vio-

lence to scientific principle or reason, are robbed of

all probative value.” Weinberg v. Northern Pac. Ry.

Co., 150 F.2d 645, 651 (8th Cir. 1945). See Anderson

v. Know, 297 F.2d 702, 719-20 (9th Cir. 1961);

United States v. Honolulu Plantation Co., 182 F.2d

172, 178 & n.15 (9th Cir. 1950); and United States

v. 102.93 Acres of Land, Etc., 154 F. Supp. 258

(E.D. N.Y. 1957), aff'd sub nom. United States v.

Fox, 257 F.2d 805 (2d Cir. 1958).

Finally, this Court has in the past refused to credit

the testimony of Government witnesses on facts simi-

lar to those in the case at bar. In Verrue, supra, this

Court affirmed the District Court’s reversal of the

Secretary’s decision invalidating a sand and gravel

mining claim for lack of discovery of a valuable min-

eral deposit. In reaching this conclusion, the Court

noted that the crucial issue was marketability and

that the testimony of the three Government witnesses

“sheds no light on that issue” because none of them

had been in the area of the mining claim during the

crucial period “nor did any one of them have personal

lla

knowledge of the sand and gravel market during

that time.” Jd. at 1204,

Fisher’s opinion, on which the Secretary exclu-

sively relies, neither avoids the inadequacies noted in

Verrue, supra, nor is it supported by the other facts

in the record. It was based upon an investigation

begun more than ten years after the close of the

crucial period. Although he stated he was familiar

with the Las Vegas area, there was no indication that

he was familiar with that area during the crucial

period. In addition, his opinion was not based upon

personal knowledge of the sand and gravel market

during that period. Rather, he gleaned his informa-

tion solely from a visual inspection of the terrain, a

review of reports and interviews with others, all con-

ducted more than ten years after the crucial period.

More importantly, his opinion was flatly contradicted

by the Hill report which was based upon an investi-

gation completed within one year of the crucial period

and also by direct evidence of marketability supplied

by persons who had actually witnessed substantial

recoveries from the claims up and down the valley

or wash. In light of these factors, we must conclude

that the Board improperly credited Fisher’s unfounded

opinion of nonvalidity.

Issue 2-(a):

A discovery of valuable sand and gravel deposits

on Claims 1 through 22, containing workable deposits

of sand and gravel of like character and quality with

l2a

the material in Claim 10, is clearly established by the

record.

Issue 2-(b):

The marketability of the pre-July 23, 1955 extrac-

tions can be tested by reason of: (1) Accessibility to

the claims; (2) Bona fides of the operators in devel-

oping the claims; (3) Existence of market demand

within reasonable proximity to the claims; and (4)

Actual participation in the market. See Clear Gravel

Enterprises, supra at 181.

The relevant evidence in the record establishes that:

(1) Accessibility of Charlestone’s Claims 1

through 22 was readily available. The area

of the wash was not remote but, to the con-

trary, readily available to major public

roads;

(2) Charlestone’s predecessors in interest made

a bona fide development and recovery of

various grades of sand and gravel from

“Contrast with the holding in Humbold Placer Mining

Company V. Secretary, No, 74-2762 at p. 6 (9th Cir. Jan. 6,

1977), where this Court reemphasized its holding in Verrue,

supra, that “ ‘positive evidence in the record of marketability’

was not offset by evidence of the lack of sales of material

and the availability of comparable material from other

sources.*”

Footnote 2 reads: “Jn Melluzzo Vv. Morton, 534 F.2d 860,

863 (9th Cir. 1976), we construed Verrue as ‘holding that

lack or insubstantiality of sales of material from the claims

in question is relevant to the question of marketability. It is

not, however, conclusive proof of lack of value. The inference

to that effect, when all evidence is considered, can be found

to have been overcome by evidence of marketability.’ ”

eee _——Vne.k.e_e_=E_RR_——aeEwE

13a

within the several claims during the pre-

July 28, 1955 period;

(3) Market demand existed for the extracted

grades of sand and gravel within reasonable

proximity to the various claims; and

(4) The predecessors actually sold the recov-

ered material in that market.

The evaluation as to whether Charlestone met tests

(3) and (4) deserves further comment. Fisher's

opinion of nonvalidity was based primarily upon: (a)

An absence of washing water; (b) The sporadic oper-

ations of Southern and Brawner; and (c) The pro-

hibitive distance of the claims from the market. We

are convinced that each of those reservations was

nullified by the only relevant evidence in the record.

The evidence established that Southern and Brawner

did actually recover sand and gravel from the claims,

transported those extractions for washing and sold

the same on the market.

The seemingly sporadic operations by Southern and

Brawner were a mirror of the building and construc-

tion industry in the Las Vegas area during and short-

ly after World War II. Continuous operation of a

placer mining claim is not a per se requisite to prov-

ing the validity of that claim. Cessation of operation

of any economic enterprise may be caused by innumer-

able factors totally beyond the bona fide intentions of

the operator. Reason dictates that periodic cessation

of operation of a placer mining claim, short of an in-

tentional abandonment of the claim, need not defeat

ultimate proof of validity.

l4a

Since a total absence of operation does not pre-

clude a finding of validity (Verrue, supra), it fol-

lows that sporadic operation does not preclude a find-

ing for validity. The Secretary does not contend there

was a pre-July 23, 1955 abandonment of the claims

by Brawner. In fact, as of July 23, 1955, Brawner

was engaged in the profitable extraction of sand and

gravel from the various claims.

The Fisher postulate of an excessive distance of the

claims from the market is meaningless. Some com-

petitors in the sand and gravel business are next door

to a construction project; yet a distant competitor

underbids and successfully competes with the next

door neighbor. The inescapable fact is that market

demand supported the recovery and sale of material

from the claims.

The prudent person test has enough flexibility to

allow a sand and gravel business operator to under-

take an apparently marginal enterprise if it has a

reasonable possibility of success. Relying on Fisher’s

opinion, the Secretary deemed Brawner to have been

a foolhardy operator; yet in many circles, pre-July 23,

1955 Las Vegas area entrepreneurs would have been

deemed astute.

Finally, we conclude that the District Court’s find-

ing that “‘at least the claims numbered 1 through 16

have been proved valid” is not clearly erroneous.

Fed. R. Civ. P. 52(a).

Furthermore we agree with the District Court’s

conclusion that Charlestone must be permitted access

to Claim 22 in order to utilize the water recovered

lba

from the well in the operation of the other valid

claims. However, we reach our conclusion upon a

rationale other than that relied upon by the District

Court.

It is agreed that the Murphy location notices were

lawfully filed under the Acts of Congress. Each of

the location notices, covering Claims 1 through 22,

described a “piece of mineral bearing ground as a

Placer claim” as distinguished from a claim location

of any particular mineral, either surface or under-

ground, within that tract of ground. “A placer loca-

tion is the location in accordance with those acts [of

Congress] of a tract of land for the mineral bearing

or other valuable deposits upon or within it that are

not found in lodes or veins in ro’: in place.” Webb

v. American Asphaltum Min. Co., 157 F. 208, 204

(8th Cir. 1907). See also 1 American Law of Mining

§ 5.10 (1976).

We are satisfied that Charlestone, as Murphy’s

successor, had the right to appropriate and utilize as

a mineral the water within any of the claims which

met the above two prong test of value and success

in development. It has been said that “ ‘Mineral’ is

a word of general language, and not per se a term of

art... . It is not capable of a definition of universal

application, but is susceptible to limitation or expan-

sion according to the intention with which it is used

in the particular . .. statute.” Bumpus v. United

States, 325 F.2d 264, 266 (10th Cir. 1963).

Since early times, water has been regarded as a

mineral. “[{T]he term ‘mineral’ has been held to em-

l6a

brace water, particularly subterranean water, irre-

spective of the character and quantity of salts and

gases which may be in solution.” 58 C.J.S. Mines &

Minerals § 2(7) (1948). (Footnotes omitted). Water

itself may be classified as a mineral. United States

v. Union Oil Co. of California, No. 74-1574, p. 3 (9th

Cir. Jan. 31, 1977).

The pertinent Acts of Congress which allow a

prospector to enter and patent placer claims for val-

uable minerals do not expressly define water as a

non-mineral. In Union Oil Co., supra at 3, this Court

hazards that “Congress was not aware of geothermal

power when it enacted the Stock-Raising Homestead

Act in 1916; it had no specific intention either to re-

serve geothermal resources or to pass title to [the

Stock-raisers].” It is common knowledge that the

successful recovery of many “hard” minerals from

the earth and the utilization of the soft mineral of

water therewith go hand in hand. 1 American Law of

Mining § 2.71 (1976). Therefore, it would be in-

congruous for us to hazard that Congress was not

aware of the necessary glove of water for the hand

of mining and therefrom Congress impliedly intended

to reserve water from those minerals allowed to be

located and recovered. In any event we decline to

do so.

The limitation in 30 U.S.C. § 611 on the location

of claims for common varieties of certain named min-

erals does not apply to water. In fact, the express

language of § 611 exempts from its operation “some

other mineral occurring in or in association with such

17a

deposit.” Therefore, it is of no importance that the

discovery of water within Claim 22 occurred after

July 23, 1955.

The water recovered from the source under Claim

22° undeniably has an intrinsic value in the desert

area. There is by the nature of Charlestone’s opera-

tions no evidence of a profitable market of the water

per se for either domestic or irrigation uses. Never-

theless the only relevant evidence in the record dem-

onstrates the existence of a profitable market of the

water as a washing agent for the sand and gravel

recovered from the valid claims. Although unwashed

sand and gravel has a limited market, good quality

sand and gravel in combination with water draws a

premium market.

We are satisfied that Charlestone has shown a

profitable market for the water recovered upon Claim

22 and its claim for the extraction of that water is

valid.

The judgment of the District Court entered on No-

vember 8, 1974, vacating the decision of the Board

dated January 18, 1973 and remanding the cause

to the Secretary is affirmed, and the cause is remanded

to the District Court for further order of remand to

the Secretary consistent with the foregoing.

AFFIRMED AND REMANDED.

* The District Court noted that the source of water under

Claim 22 was present on the date of Murphy’s notice of

location.

18a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DC # CIV LV-2039 BRT

No. 75-1532

CHARLESTONE STONE PRODUCTS Co., INC.,

PLAINTIFF-APPELLEE

v.

CrEcIL D. ANDRUS, SECRETARY OF THE INTERIOR,

UNITED STATES OF AMERICA,

DEFENDANT-APPELLANT

THIS CAUSE came on to be heard on the Tran-

script of the Record from the United States District

Court for the District of Nevada and was duly sub-

mitted.

ON CONSIDERATION WHEREOF, it is now

here ordered and adjudged by this Court that the

judgment of said District Court in the Cause be, and

hereby is affirmed and remanded.

Filed and entered May 12, 1977.

19a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEVADA

Civil No. LV-2039 BRT

CHARLESTONE STONE PRODUCTS Co., INC., PLAINTIFF

vs.

ROGERS C. B. MORTON, DEFENDANT

MEMORANDUM OPINION

This contest of a group of twenty-four placer min-

ing claims was initiated by a contest complaint filed

in the Nevada Land Office, Bureau of Land Manage-

ment, on November 12, 1965. The contest attacks the

validity of placer mining locations for sand and

gravel known as Charlestone Claims numbered 1

through 22, No. 12A and No. 138A. After hearings

and appeals in the administrative agency, the final

decision of the Interior Board of Land Appeals, dated

January 18, 1973 (9 IBLA 94), was to the effect

that only Charlestone No. 10 placer claim is valid

and that all the other claims are invalid. Reference

is made to the decision of the Interior Board of Land

Appeals for most of the facts pertaining to the prop-

erty and to the proceedings.

20a

After reviewing the entire record in this case, we

believe that the only reasonable conclusion is that the

decision is wrong and that an injustice has been done.

The difficulty presented is in applying established

law with respect to the scope of administrative re-

view and established law concerning the validity of

mining claims for sand and gravel to the undisputed

facts in this case in order to achieve a just result.

First, it should be noted that throughout the a-

ministrative proceedings, at least one of the mining

claims has been found to be unquestionably valid.

The Administrative Law Judge found both Claim No.

9 and Claim No. 10 to be valid. The Interior Board

of Land Appeals, on cross-appeals by the Government

and the contestee, found only Claim No. 10 to be valid.

The importance of this is that there is no dispute with

respect to the mineral character of the deposit at and

prior to July 23, 1955 when Congress removed com-

mon varieties of sand and gravel from location under

the mining laws. It is also undisputed that all the

twenty-four claims contain workable deposits of sand

and gravel of like character and quality with the

material in Claim No. 10. All but one of the claims

was held invalid only because the material from all

the claims could not be shown to be marketable at one

time or within the near future.

The case for the Government before the Adminis-

trative Law Judge was rested on the testimony of

Donald G. Fisher, a qualified mining engineer, whose

opinion that all the claims were invalid was obviously

of little weight because he was not thoroughly fa-

2la

miliar with the history of the claims and the mining

activity on the claims and had little or no knowledge

of the economics of the market respecting sand and

gravel in the Las Vegas Valley where the claims were

located. He based his opinion of invalidity on his

knowledge of the history of the market respecting

sand and gravel in the Las Vegas Valley where the

claims were located. He based his opinion of invalid-

ity on his knowledge of the history of the claims,

which the direct evidence produced by the contestee

proved to be incorrect, and upon his opinion that “this

was a very sporadic operation * * * it didn’t appear

to be an operation that could sustain a continuous

operation over the years.” We know of no established

principle of mining law which would support these

as reasons for invalidating a mining location under

the established prudent man and marketability tests.

There is no requirement that an operation must be

continuous or sustained. The weakness of this type

of evidence has been recognized by the Ninth Circuit

in Verrue v. United States, 457 F. 2d 1202 (9th Cir.

1972), and by the Interior Board of Land Appeals

in United States v. Gibbs, decided November 21, 1973

(13 IBLA 382).

This case is unique, as compared with other sand

and gravel mining claim cases which have come to

the attention of this Court, in the fact that in the

Summer of 1956, two qualified engineers, Starr Hill,

Jr. and Earl M. D. Lovejoy, employed by the Bureau

of Land Management in Nevada were assigned to

make a study and report on sand and gravel market-

22a

ability in Las Vegas Valley, Nevada. The report was

completed in November of 1956 and constitutes a com-

prehensive and informative discussion of the factors

bearing upon a determination of marketability of

sand and gravel deposits and of the quality of par-

ticular sand and gravel deposits, including the Charle-

stone claims, approximately as of the time the Act of

Congress prohibited further location of these mate-

rials under the mining laws. At that time, the instant

claims were being mined by the E. J. Brawner Sand

& Gravel Co. under lease, which company was pro-

ducing suitable material for the manufacture of con-

crete pipe, plaster and masonry sand. The deposition

of Starr Hill, Jr. was taken in the instant contest pro-

ceedings on October 21, 1969, and Mr. Hill stated

that it was his opinion at the time of his report that

the Charlestone claims were valid mining claims, tak-

ing into consideration all the criteria applicable to

such a determination. His opinion was based upon

an actual physical inspection of the claims, an investi-

gation of the history of the operation of the claims

since they were located in 1942, and his knowledge

of the marketability of the product resulting from

the thorough study he had made in conjunction with

Mr. Lovejoy. This is by far the most credible evidence

in the record respecting the quality and marketability

of the deposit. The evidence shows that with respect

to quality, the deposit of sand and gravel in the

Charlestone claims is the best in the Las Vegas Valley.

The Brawner company operated under its lease

until 1959. In 1960, the contestee acquired the claims,

23a

and in 1961, Morrison-Knudsen Company produced

coarse aggregates from the claims but other produc-

tion was hampered because of lack of water. Earlier

unsuccessful efforts had been made to drill wells on

Claim No. 9 and Claim No. 10. In 1962, the con-

testee was successful in obtaining a producing well

on Claim No. 22. On July 15, 1964, Charlestone Stone

Procucts, Inc., the contestee, entered into a lease with

Arden Sand & Gravel Co., Inc. conveying claims num-

bered 1 to 16, inclusive, for a period of five years

with an option to renew for an additional period of

five years on the basis of a production royalty per

yard but subject to a minimum royalty of $12,000

per year, payable in quarterly installments. The lease

also provided for the lessor to install a power line to

the claims and to make water available to the lessee

from the well on Claim No. 22. It is notable that this

lease was entered into before the Government contest

was initiated and after the Bureau of Land Manage-

ment had affirmed the validity of the claims (Ex. J)

upon inquiry from the Nevada Department of Water

Resources. In fact, the record shows that after the

November 1956 report made by Hill and Lovejoy, the

Bureau of Land Management had considered the

Charlestone claims to be valid and had removed the

area of the claims from a small tract classification

which had theretofore been made.

- There is nothing in the evidence which would sup-

port even a suspicion that the agreement entered into

on July 15, 1964 between Charlestone Stone Products,

Inc. and Arden Sand & Gravel Co., Inc. was anything

24a

but a genuine agreement. It provided for the convey-

ance for a term of years of sixteen of the claims in

question at a guaranteed minimum royalty of $12,000

per year. Any inference that the agreement was ficti-

tious or “window dressing” was dispelled by the fact

that it conveyed only sixteen claims and the lessor

retained claims numbered 17, 18, 19, 20, 21 and 22

(which had the well) for its own operations. If this

had been a fictitious agreement entered into in antici-

pation of a Government contest of the claims, such

deviousness would have suggested a lease of all the

claims. In fact, there is no suggestion anywhere in

the record, in the findings of the Administrative Law

Judge, or in the findings of the Interior Board of

Land Appeals that this is anything but a genuine

agreement. Of course, performance of the agreement

was frustrated when the Government saw fit to ini-

tiate the contest proceedings in November of 1965,

basing its contest solely on the uncorroborated and

relatively weightless opinion evidence of Mr. Fisher.

The success of the contestee in obtaining a well on

Claim No. 22 and the agreement entered into on July

15, 1964 are substantial evidence that the owners of

the claims could have sold and extracted material

from these claims at a profit prior to July 23, 1955.

There is no reason to suppose that the same well

could not have been obtained in 1954 and the finding

of a water supply was a major circumstance justify-

ing an investment of from $200,000 to $300,000 for

a large operation. See: United States v. Gibbs, supra.

25a

This is the first case this Court has encountered in

which present marketability of the deposit has been

established by proof of a genuine agreement for lease

of the deposit with a substantial guaranteed minimum

royalty. The existence of these facts, however, seem

to be well-nigh irrefutable proof of marketability.

The Administrative Law Judge and the Interior

Board of Land Appeals ignored this evidence. In this

respect, the final action of the administrative agency

was arbitrary and capricious and not supported by

the evidence. We see no rationality in a conclusion

that proof of marketability can be established only

by direct sales from the property in small quantities.

Operations under the agreement dated July 15,

1964 were frusirated by the initiation of the contest

proceedings which made it imprudent to invest $200,-

000 or more in a plant which was anticipated in order

to implement the operations under the lease. Of

course, the lessor and lessee had no way of anticipat-

ing that final determination of the rights of the par-

ties in the administrative proceedings would consume

some eight years.

The decision of the Administrative Law Judge and

the Interior Board of Land Appeals with respect to

claims numbered 12A and 13A is obviously correct.

These locations are invalid because made after July

23, 1955, and the finding that the material is a com-

mon variety of sand and gravel is supported by the

evidence despite the fact, as we have already observed,

that this is the best deposit with respect to quality in

the Las Vegas Valley.

26a

A few observations may be pertinent with respect

to the quantities of the material in this deposit. The

Hill and Lovejoy report estimated reserves of 20,000,-

000 cubic yards. That report also makes it clear, how-

ever, that the method of mining is an important fac-

tor with respect to cost. The surface material may

be bulldozed—the cheapest method. If a pit is exca-

vated, more expensive equipment and more personnel

to operate a shovel and trucks are required. Although

there is evidence in the record that at least in some

locations the deposit of quality sand and gravel may

exist in depth in excess of two hundred feet, it does

not follow as a matter of course that sand and gravel

at that depth could be economically mined in an open

pit operation. Mining at that depth is obviously much

more expensive: © .o hazardous. There is no evidence

in the record i.om which the quantity of reserve ma-

terial which can be economically mined can be reli-

ably estimated and it is pure guesswork and specula-

tion for the Government to limit the claims validated

to No. 10 or No. 10 and No. 9.

It is the opinion of this Court that at least the

claims numbered 1 through 16 have been proved valid

and that access to Claim No. 22 must be permitted so

that the water produced from the well on that claim

may be made available to the operations on the valid

claims.

The decision of the Interior Board of Land Appeals

dated January 18, 1973 is vacated and set aside and

this matter is remanded to the Department of the

27a

Interior for further proceedings consistent with this

Memorandum Opinion.

Dated: November 7, 1974.

/s/ Bruce R. Thompson

United States District Judge

28a

APPENDIX D

[SEAL]

UNITED STATES

DEPARTMENT OF THE INTERIOR

Office of Hearings and Appeals

Interior Board of Land Appeals

4015 Wilson Boulevard

Arlington, Virginia 22203

UNITED STATES

Vv.

CHARLESTONE STONE PRODUCTS, INC.

IBLA 71-111 Decided January 18, 1973

Appeals from decision of Administrative Law

Judge Graydon E. Holt in mining contests Nevada

065729 A to Q, inclusive, and Nevada 065731 A &

B.

Decision affirmed in part, reversed in part.

Mining Claims: Common Varieties of Minerals:

Generally—Mining Claims: Determination of Va-

lidity—Mining Claims: Discovery: Marketability

To satisfy the requirements for discovery on a

placer mining claim located for a common variety

of sand and gravel prior to July 23, 1955, it must

be shown that the exposed material could have

been extracted, removed and marketed at a profit

on that date, and further that the market for

29a

the material from the claim has continued with-

out substantial interruption to the present time;

where such a showing is made, a contest against

that claim is properly dismissed.

A placer mining claim Jocated for a common

variety sand and gravel prior to July 23, 1955,

from which claim mineral material was ex-

tracted, removed and marketed at a profit on

that date, and which mineral material could have

participated in the same market without inter-

ruption to the present time, is properly declared

to be a valid mining claim.

Mining Claims: Common Varieties of Materials:

Generally

To satisfy the requirements for discovery on a

placer mining claim located for common varieties

of sand and gravel before July 23, 1955, it must

be shown that the materials within the limits of

the claim could have been extracted, removed, and

marketed at a profit as of that date. Where the

evidence shows that there is an abundant supply

of similar sand and gravel in the area of the

claim, that sand and gravel was being produced

and sold in the area on July 23, 1955, and that

no sand and gravel had been or was being mar-

keted from the claim as of that date, the fact

that the material on the claim is sufficient both

as to quantity and quality, as is the abundant

supply of similar material found in the area, is

insufficient to show that material from this par-

30a

ticular claim could have been profitably removed

and marketed on July 23, 1955, and the claim

is properly declared null and void.

Mining Claims: Discovery: Marketability

To satisfy the requirements of discovery on a

placer mining claim located for sand and gravel

prior to July 23, 1955, it must be shown that

the deposit could have been extracted, removed,

and marketed at a profit as of that date and not

as of some prospective date, and where claim-

ants fail to make such a showing the claim is

properly declared null and void.

Mining Claims: Contests—Mining Claims: Deter-

mination of Validity

To establish a prima facie case and to meet its

burden of proof in a mining contest, the govern-

ment is required only to show by competent evi-

dence that there has been no discovery of a valu-

able mineral deposit.

Mining Claims: Common Varieties of Minerals:

Generally

Deposits of high quality sand and gravel, suit-

able for use without expensive processing, but the

market for which is limited to use for road base,

asphalt mix, concrete aggregate and rock chips,

the same purposes for which other widely avail-

able, but less desirable, deposits are marketed

at the same price, are common varieties of sand

and gravel not locatable since these facts do not

3la

give them a special, distinct value as defined in

the Act of July 23, 1955.

Mining Claims: Common Varieties of Minerals: Gen-

erally—Mining Claims: Determination of Va-

lidity

Where a placer mining claim was located for

common variety sand and gravel prior to July

23, 1955, and sand and gravel was mined, re-

moved and marketed at a profit before and on

July 23, 1955, it is proper to consider the claim

as having demonstrated a present marketability

as of that date.

APPEARANCES: W. C. Lamoreaux, Esq., Salt Lake

City, Utah, and E. A. Hollingsworth, Esq., Las Vegas,

Nevada, for the contestee; Otto Aho, Esq., Field

Solicitor, United State Department of the Interior,

Reno, Nevada, for the contestant.

OPINION BY MR. HENRIQUES

Contestee appeals from the decision of Administra-

tive Law Judge Graydon E. Holt ' declaring null and

void its Charleston, Charleston Nos. 1-8, 11-12, and

Charleston 12A and 13A placer mining claims. Con-

testant appeals from the decision of the Judge de-

claring valid Charleston Nos. 9 and 10 placer mining

claims.

The change of title of the hearing officer from “Hearing

Examiner” to “Administrative Law Judge” was effectuated

pursuant to order of the Civil Service Commission, 37 F.R.

16787 (August 19, 1972).

32a

The contest was initiated by the filing of a com-

plaint in the Nevada Land Office, Bureau of Land

Management, on November 12, 1965. In the com-

plaint, the contestant alleged that:

1. Valuable minerals have not been found within

the limits of the claims so as to constitute a

valid discovery within the meaning of the min-

ing laws.

2. No discovery of a valuable mineral has been

made within the limits of the claims because

the mineral materials present could not be mar-

keted at a profit prior to the Act of July 23,

1955.

The contestee filed an answer controverting these

allegations and a hearing was held before an Ad-

ministrative Law Judge on October 28 and 29, 1969,

at which time both sides presented supportive testi-

mony and submitted various evidentiary exhibits. On

October 30, 1970, the Judge handed down his de-

cision from which both sides have taken an appeal.

The crucial determinations of the Judge were as

follows:

1. That the claims embraced a common variety

of sand and gravel, such as was removed from

mineral location by the Act of July 23, 1955;

That marketability as of July 23, 1955, was

shown only as relates to Charleston Claim No.

10;

4. That all other claims were null and void for

the lack of a valid discovery.

te

.

33a

Before discussing the many points raised on appeal

it would be helpful to examine the historical back-

ground of the claims in question. The Judge very

succinctly stated the history of the claims and his

statements, set out below, are hereby adopted:

The Charleston and Charleston Nos. 1-22 placer

claims were located February 18, 1942, by A. M.

Murphy and Fred Pine. They quitclaimed the

claims to Frank R. Sullivan on April 9, 1959,

and he quitclaimed the claims to the Charleston

Stone Products, Inc., on January 4, 1960. The

Charleston Nos. 12A and 138A were located on

September 15, 1961, by the contestee-corporation.

The claims embrace a massive sand and gravel

deposit in a canyon extending from west to east

over a distance of four miles. The descending

gradient of the canyon floor is approximately

375 feet per mile eastward. The center of the

claims is 15 miles northwest of Las Vegas, Ne-

vada, and they are accessible to the city by road.

The quality of the sand and gravel is excellent

for such uses as road bases, concrete and plaster

aggregate, and leach rock. The quantity has not

been determined but the parties were in sub-

stantial agreement that there is [sic] at least

20,000,000 cubic yards of material and probably

a great deal more.

Prior to 1940 Las Vegas was a relatively small

community and much of the land surrounding the

city was public land. During that period when-

ever a builder or contractor wanted small quanti-

34a

ties of sand or gravel he merely took the ma-

terial from the most convenient location on the

public land. The material on the Charleston

group of claims was used in this manner for

many years when there was a construction pro}-

ect in the area. In recent years the city has be-

come an industrial complex and much of the sur-

rounding public land has been disposed of under

various land laws and regulations. Because of

this loss there is now a limited number of sites

on remaining public land to secure quality sand

and gravel. The land on which the Charleston

claims are located was at one time reserved for

small tract classification by the Bureau of Land

Management. Later the Bureau determined that

the canyon was subject to flash floods and was

not suitable for small tracts. The Bureau then

revoked the classification. There was no sugges-

tion that the land within the claims is valuable

for a purpose other than for the mining of sand

and gravel.

Shortly after the claims were located in 1942,

they were leased to Southern Nevada Industries,

Inc. This company used the sand and gravel at

first to make concrete blocks and later for the

construction of the runways at Nellis Air Force

Base, a short distance north of Las Vegas. The

company had the material trucked to their plant

some 10 miles north of the city. In the plant it

was crushed, screened and washed. Mr. R. J.

Kaltenborn, President of the company at the

35a

time, testified that the company removed from

75 to 100 thousand cubic yards of material at

5 cents a yard royalty during 1942 and 1943.

In the latter part of 1943 the company opened

a pit near Henderson, 13 miles southeast of Las

Vegas, and discontinued using materials from

the claims.

The next major user of the claims was E. H.

Brawner. Mr. Brawner leased the claims on Sep-

temper 18, 1954, for a five-year period and

agreed to pay a royalty of 10 cents a cubic yard

for material removed but not less than $200 per

month (Exh. X-5). A number of: witnesses re-

called the Brawner operation on the claims be-

tween 1954 and 1958 and described his activities

in considerable detail. Probably the most ac-

curate description can be found in the deposition

of Starr Hill, Jr. In 1956 Mr. Hill and Earl

M. P. Lovejoy, as mining engineers for the Bu-

reau of Land Management, made a marketability

study of the sand and gravel industry in the Las

Vegas Valley. Their report is dated November

1956 (Deposition Exh. A).

Mr. Hill testified that he and Mr. Lovejoy ob-

served the Brawner operation in September and

October 1956. The equipment consisted of a

crusher and grader which was located in a large

pit on Claims 9 and 10. At that time Mr. Braw-

ner had produced 15,000 yards from the pit for

use as plaster and masonry sand, concrete blocks

and conduit pipe aggregates. The Stocks Mill and

Supply Company was the major purchaser of the

36a

material. Mr. Hill described the deposit and ex-

pressed the belief that it was the best material

he had seen in the valley from the standpoint of

quality and quantity. The material on the west-

ern end of the claims is relatively free from fines

or silt. On the eastern and lower end the amount

of fines in the deposit increases. The Brawner

deposit was the farthest operating deposit from

Las Vegas at the time but many of the other

deposits had excessive fines. Statistical informa-

tion from the report is that the depths of the

deposit exceeds 120 feet, calculated reserves 20,-

000,000 cubic yards, and the cost of a semi-

portable plant was estimated to be $76,000. On

page 42 of the report Mr. Hill listed the future

orders for November 1956 at $6,800, for De-

cember 1956 and January 1957 at $5,950 and

for February, March and April 1957 at $23,000.

Mr. Brawner had no water to wash the fines in

the material but did have a blower to remove the

silt and other fines. Mr. Hill expressed the be-

lief that the claims were valid.

The Brawner lease was canceled as a result of

a judicial decree dated August 13, 1959. The

claim owners had prayed for such cancellation

and a judgment of $8,000 for the nonpayment of

royalties (Exh. X-5).

Before further discussing the evidence adduced,

two issues should be examined. First, the require-

ments for a discovery are now well established. A

discovery exists:

37a

[W]here materials have been found and the

evidence is of such a character that a person of

ordinary prudence would be justified in the fur-

ther expenditure of his labor and means with a

reasonable prospect of success in developing a

valuable mine * * *. Castle v. Womble, 19 L.D.

455, 457 (1894); United States v. Coleman, 390

U.S. 599 (1968).

This “prudent-man” test has been refined by a

requirement that showing be made that the mineral

in question can be extracted, removed and marketed

at a profit. United States v. Coleman, supra. This

“marketability test” has been specifically held to be

applicable in determining the validity of sand and

gravel claims in the Las Vegas area. Palmer v.

Dredge Corp., 398 F.2d 791 (9th Cir. 1968), cert.

denied, 393 U.S. 1066 (1969). And since the Act

of July 23, 1955, 30 U.S.C. §§ 611 et seg. (1970),

withdrew common varieties of sand and gravel from

location under the mining laws, it is necessary that

the claimant for such materials show marketability

as of that date. Palmer v. Dredge Corp., supra;

United States v. Clear Gravel Enterprises, Inc., 2

IBLA 285 (1971).

Furthermore, under well settled rules:

* * * it must be shown * * * that there was a

valid discovery on each claim at the time of the

application for patent. That is, irrespective of

the date on which a discovery may have been

made, the claims are now invalid if, because of

38a

exhaustion of the deposits, or change of eco-

nomic conditions, cessation of a market for the

material, or some other cogent factor, the value

of the materials will not justify further expen-

ditures for the development of a mine.

United States v. Paul M. Thomas, et al., 1 IBLA 209,

78 I.D. 5, 19 (1971). This principle is of equal

applicability to contest proceedings initiated prior to

application for mineral patent. See Mulkern v. Ham-

mitt, 326 F.2d 896 (9th Cir. 1964). So it is clear

that not only is a showing of marketability as of

July 23, 1955, required, but that the contestee must

also establish that in the interval from the date of

the withdrawal of common varieties of sand and

gravel from mineral location to the date of the con-

test proceedings a market for the common variety

mineral has continued without any prolonged in-

terruption. This requirement flows from the fact

that if the marketability of the common variety min-

eral for which the claim was located is lost, the va-

lidity of the location is similarly lost and the claim

may be declared null and void after contest proceed-

ings. Mining claims are properly declared null and

void for lack of present discovery of a valuable min-

eral deposit where there is no market or any reason-

able prospect for a future market for the mineral

for which the claims were located. United States v.

Estate of Alvis F. Denison, 76 1.D. 223 (1969), Mul-

kern v. Hammitt, 326 F.2d 896 (9th Cir. 1964). Since

the Act of July 23, 1955, supra, expressly removed

common varieties of sand and gravel from location

under the mining laws, later recovery of a profitable

market cannot serve to resuscitate such invalid

claims.

Second, the contestee strenuously contends that the

Judge erred when he held that a showing of market-

ability of the sand and gravel deposit on each claim

was required to validate that claim. It cites the de-

cision rendered in United States v. Alfred N. Verrue,

75 I.D. 300, 306 (1968) :

* * * [I]t must be shown * * * that the par-

ticular deposit itself can, and could at the critical

date, be mined and marketed at a profit.

From this it argues that proof of marketability on

any one claim should be sufficient to establish market-

ability on all claims which embrace the same deposit.

Suffice it to say that such is not the law as con-

sistently applied by this Department. There must be

evidence as to the marketability of each of the claims.

See e.g., United States v. Henrietta Bunkowski znd

Andrew Julius Bunkowski, 5 IBLA 102, 120, 79 I.D.

43, 51-52 (1972), “The appellants must show as to

each claim that they have found a mineral deposit

which satisfies the prudent man rule. . .” (emphasis

in original); United States v. Frank and Juanita

Melluzzo, 76 1.D. 181, 189 (1969), “The appellants

must show as to each claim that they have found a

valuable mineral deposit and that a prudent man

would have been justified in the further expenditure

of his labor and means with a reasonable prospect of

success in developing a valuable mine on that claim.”

40a

(emphasis in original) See also Osborne v. Hammitt,

Civil No. 414 U.S. D.C.D. Nev. August 19, 1964.

Contestee’s argument applied to the location of com-

mon varieties of sand and gravel, would prove too

much. Under its auspices a person could locate an

entire desert and establish its marketability by selling

sand and gravel from a single location. The fact

that contestee’s location followed the bed of a wash

and that it has not attempted to embrace an entire

alluvial fan would not limit the scope of the rule

it seeks to have implemented.

Its argument that the effect of such a holding is to

require competition with itself has been pressed be-

fore. See United States v. Fisher Contracting Com-

pany, A-28779 (August 21, 1962). There, as here,

the contestee has misunderstood the thrust of the

requirement. It is not required that the claimant

produce from each claim, but that it show market-

ability from each claim. Production is not a pre-

requisite for a finding of marketability. See United

States v. Howard S. McKenzie, 4 IBLA 97 (1971).

The Department, however, has recognized the diffi-

culty of proving marketability without showing any

sales, pointing out in numerous cases that, while the

fact that no sale had been made at the critical time

is not controlling in itself, the fact that nothing is

done toward the development of a claim after its

location may raise a presumption that the market

value of the minerals found therein was not suffi-

cient to justify the expenditure required to extract

and market them. United States v. E. A. Barrows

4la

and Esther Barrows, 76 1.D. 299, 306 (1969), and

cases cited.

Testimony that there was a general demand for

sand and gravel in the Las Vegas area of the type

present on these claims is insufficient to satisfy the

present marketability test; the claimants must show

the existence of an actual demand for material from

specific claims as of July 23, 1955. See United States

v. William A. McCall, Sr., et al., 2 IBLA 64, 78 I.D.

(1971).

The contestee argues that the Government failed

to present a prima facie case as to the invalidity of

the claims. What is required of the Government to

sustain its burden has been stated in the past in a

variety of ways. It has been said that: “[p]rima

facie means that the case is completely adequate to

support the government’s contest of the claim and

that no further proof is needed to nullify the claim.”

United States v. Henrietta Bunkowski and Andrew

Julius Bunkowski, supra. This burden has been held

to have been met where there is “testimony * * * by

a government mineral examiner that he has examined

the mining claims and the workings thereon but

found no evidence of a valuable mineral deposit.”

United States v. Harold H. Benson, A-31061 (Sep-

tember 4, 1969); United States v. L. B. McGuire, 4

IBLA 307 (February 4, 1972). In the case at bar,

Donald Fisher, a mining engineer employed by the

Department of the Interior, testified as to his investi-

gations of the claims, which included an examina-

tion of the land as well as interviews with various

42a

sand and gravel operators in the Las Vegas valley

and from which he concluded that there had been no

discovery as of July 23, 1955, because of the exces-

sive distance to Las Vegas market and the produc-

tion of other competitors in the area. Thus, the Gov-

ernment established a prima facie case of invalidity

under the requirements set out above.

The Government having presented a prima facie

case, the burden of’ proof was on the contestee to es-

tablish a discovery as to each claim. To expedite the

consideration of the evidence and testimony presented

in the hearing, a synopsis of the testimony of wit-

nesses which have relevance to this issue follows.

The Government witness, Fisher, testified that from

the size of the pits remaining he estimated that the

following quantities had been extracted: from the

Charleston No. 4, 1,370 cubic yards; No. 6, 100 cubic

yards; No. 7, 55 cubic yards; No. 9, 4,485 cubic

yards; No. 10, 84,400 cubic yards; No. 14, 37,700

cubic yai is; No. 16, 15,615 cubic yards; No. 17, 24,-

485 cubic yards; No. 18, 350 cubic yards; No. 21,

2,830 cubic yards. Two factors, however, must be

kept in mind in dealing with these figures. First,

they do not represent the amount of material re-

moved as of July 23, 1955, but rather indicate the

total amount taken through 1965, and, in some minor

cases, thereafter. The second point is that Claims

Nos. 1-10 lie directly in a wash and thus are subject

to fill in occurring as a result of flash flooding. There-

fore, it is possible that deposition has erased evidence

43a

of greater excavations than were indicated by Fisher’s

calculations.

Fisher also testified that the haul from the main

pits located on Claim No. 10 to the Las Vegas market

was 15 miles and that in 1955 it would have re-

sulted in excessive costs making operations on the

claims unprofitable. |

The Government introduced a report, written in

1961 by Edgar A. Hollingsworth, contestee’s attorney,

who at that time was employed by the Bureau of Land

Management, Department of the Interior, which in

reference to the termination of the Brawner opera-

tions declared: “According to the other operators in

the area, the excessive length of the haul necessary to

get finished products to market caused the company

to cease its operations.”

The contestee presented a number of witnesses.

Rae Allen Wheeler, Jr., who had been in a trucking

busihess in Las Vegas for 25 years, testified that he

hauled approximately 300 tons of leach rock a day

from Claims Nos. 4, 6, 16, 17, and 21, or a total of

3,000 to 4,000 tons a month from the middle of 1954

to 1958. This leach rock was for use in a sewage

plant then under construction. The witness admitted

that since that time he had not hauled any leach rock

to the sewage plant.

Vernon Frehner, a contractor and trucker in the

area, testified that he hauled approximately 5,000

cubic yards of road chips from 1954 to 1957 or from

1956 to 1957 from the Charleston claims and that he

got “some of it” about a quarter or a half mile up

44a

the wash from the pit on Claim No. 10, which would

put the extractions either within Claims Nos. 6, 7 or

8. He also declared that he generally hauled from

Claims Nos. 11 and 12.

H. Guy Jacka, superintendent of streets for the

city of North Las Vegas, testified that he had pur-

chased several thousand tons of rock chips annually

from 1954 to 1958 from Brawner. He declared that

he was familiar with the claims and that the material

had come from Claims Nos. 13, 13A and 14.

The testimony of Harrison S. Stocks, Chairman of

the Board of Directors of the Stocks Mill and Supply

Company, was secured by deposition. Stocks declared

that fievhad used material from the area of the claims

for more than 30 years for his concrete aggregate

and plaster sand business. The materials had been

obtained from Claims Nos. 8, 10, 11, 12, 14 and 15.

While the exact amount obtained was unclear, Stocks

testified that fairly large quantities were removed.

Stocks further testified, however, that beween 1948

and 1964 his company had very little interest in the

claims. He also stated that Brawner did not have a

processing plant to wash his material and as a result

could not sell sufficient material.

Herman J. Young testified that after the contestee-

corporation acquired the claims in 1960, he conducted

an investigation on behalf of Morrison-Knudsen Con-

struction Company to determine the feasibility of

operating a plant on the claims for all types of aggre-

gates such as base coarse, asphalt coarse, and concrete

aggregate. A screening plant was constructed on

45a

Claim No. 10 and was in operation sporadically from

1963. He planned a much more elaborate plant to

crush, grade and wash the material but, owing to

internal dissension within the company, he was not

able to construct such a plant. Young expressed the

belief that a screening plant alone was not feasible

but that a complete plant to produce all potential sand

and gravel products would be profitable. In addition

to the operation on Claim No. 10, Morrison-Knudsen

produced 37,000 cubic yards of type 1 fill material

from Claim No. 14 during this period. Morrison-

Knudsen paid the contestee $7,071 for 28,284 yards

of this material in 1963 and 1964 (Exhibits N, 0,

and P). When questioned regarding the reserves of

aggregate remaining on Claims Nos. 9 and 10 he esti-

mated that there were approximately 48,000 cubic

yards for each foot of depth which would amount to

4,800,000 cubic yards at a depth of 100 feet.

John C. Godfrey, Secretary of Charleston Stone

Products, Inc., testified that in recent years the cor-

poration excavated a well with ample water on Claim

No. 22 at a cost of $13,000 and installed a large stor-

age tank for use in the washing of gravel. After se-

curing this water, the corporation negotiated a lease

agreement with Arden Sand and Gravel Company and

Stocks Mill and Supply Company. The lease dated

July 15, 1964 (Exh. B), provides for minimum roy-

alty of $12,000 per year and requires the contestee to

construct a power line from the nearest available

supply point to the well on Claim No. 22. The lease

contemplated that the Arden Sand and Gravel Com-

46a

pany would produce sand and gravel products and

that the Stocks Mill and Supply Company would pur-

chase the material for use as concrete mixed in its

aggregate business.

Two other witnesses testified that they made re-

movals of materials from various claims. Another

testified that his company (Concrete Conduit) pur-

chased approximately 22,000 cubic yards in two years

commencing sometime after 1965, the material com-

ing from Claim No. 10.

Contestee contends that the sand and gravel de-

posits located on each of the claims is an uncommon

variety with the result that it is not required to prove

marketability as of July 23, 1955, but only as to the

time of the institution of contest proceedings. The

relevant statute provides, inter alia, that:

No deposits of common varieties of sand, stone,

gravel, pumice, pumicite, or cinders and no de-

posit of petrified wood 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 mineral claims hereafter located

under such mining laws. * * * “Common varie-

ties” as used in sections 601, 603, and 611 to 615

of this title does not include deposits of such ma-

terials which are valuable because the deposit

has some property giving it distinct and special

value. * * * (Emphasis added.) 30 U.S.C. § 611.

The regulations regarding common varieties are

found in 43 CFR 3711.1(b):

47a

“Common varieties” includes deposits which,

although they may have value for use in trade,

manufacture, the sciences, or in the mechanical

or ornamental arts, do not possess a distinct, spe-

cial economic value for such use over and above

the normal uses of the general run of such de-

posits. **¢ 2

The Department has interpreted the Act and regu-

lations so as to require an uncommon variety of sand,

stone, e'c., to meet two criteria: “(1) that the deposit

have a unique property, and (2) that the unique

property give the deposit a distinct and special value.

Possession of a unique property alone is not sufficient.

It must give the deposit a distinct and special value.

The value may be for some use to which ordinary

varieties of the mineral cannot be put, or may be for

uses to which ordinary varieties of the mineral can be

or are put; however, in the latter case, the deposit

must have some distinct and special value for such

use.” United States v. U. S. Minerals Development

Corporation, 75 I.D. 127, 1384 (1968).

The criterion for determining whether a deposit of

sand and gravel claim contains an uncommon variety

is whether the material from the deposit commands a

higher price in the market place or has uses for which

ordinary varieties would be unsuited. United States

v. U. S. Minerals Development Corporation, supra.

The Judge in the case at bar held that “the sand and

gravel on this group of claims are high quality mate-

rials but used only for the same purposes as many

48a

other deposits of sand and gravel in the Las Vegas

Valley. There was no evidence that the materials

have a special and distinct value for these uses.” Ac-

cordingly, he held that the deposit must be considered

a common variety as defined in the Act of July 23,

1955, supra.

The contestee takes vigorous exception to this find-

ing and argues that for a variety of reasons the de-

posit is unique.* A close reading of the Judge’s deci-

sion, however, reveals that he did not controvert this

contention but rather found that there was no evi-

dence, even assuming the presence of unique proper-

ties, that these properties imparted a distinct value

to the deposit.

On this point, rather than attacking the Judge’s

findings of fact, the contestee argues that the position

of the Department is unsustainable by any fair read-

ing of the statute. It argues that the Department is

limited to a consideration of the intrinsic properties

of the mineral and that by relating its special value

to its proposed use, the Department has violated the

intent of the Congress in enacting section 3, Act of

July 23, 1955, supra.

2 Among the qualities which he contends might give the

deposit unique value are: high specific gravity; marked re-

sistance to abrasion; insignificant reactivity; and absence of

caliche. In light of the disposition of this issue, infra, it is

not necessary to decide whether the conjunction of the charac-

teristics set out are sufficient to give the deposit a unique

value.

49a

The difficulty with the contestee’s position is that

the statute requires that the deposit, to be uncommon,

must have “some property giving it distinct and spe-

cial value.” Valuation, by its nature, requires ad-

vertence to exogenous factors. Gold has value in rela-

tion to the scarcity of its occurrence. By the same

token, to speak of the value of so ubiquitous a com-

modity as sand or gravel without reference to its use

is to shovel smoke. In dealing with such commonly

occurring minerals consideration of prospective use

is an integral adjunct to any attempt to ascertain

value, and particularly to determine “special value”

as required by the clear statutory language. The con-

sideration of prospective use is not extrinsic in the

sense of the location of the deposit; rather it is part

and parcel of the evaluation of the deposit mandated

by Congressional intent. As such, Departmental prac-

tice is clearly in accord with the statutory provisions.

As there has been no evidence introduced that the

sand and gravel occurring in the deposit can call forth

a higher price for any of its destined uses, even as-

suming arguendo that it is of superior quality, the

Judge was correct in holding that the minerals were

a common variety. And, a fortiori since the Charle-

ston Claims Nos. 12A and 13A were not located until

after July 23, 1955, they cannot be the subject of a

valid discovery.

On the issue of marketability the Judge found

that:

50a

“Mr, Brawner was operating from Claim 10

and was utilizing material from Claim 9 at the

rate of approximately 5000 yards a year * * *

As to the latter part of 1955 or in 1956 the

Brawner operation would have been sufficient to

validate Claim 10 and, as the source of the

reserve material, Claim 9.

The government raises a number of contentions

regarding this finding. First, it argues that the re-

movals, at the rate of 5,000 cubic yards annually,

represent such a small amount of income that they

should be considered de minimim. See, e.g., The

Atchison, Topeka & Santa Fe Railway Co. v. Emma

Mae Cox, 4 IBLA 279 (January 31, 1972). It is

noted in the record, however, that Mr. Brawner, as a

lessee had agreed to pay a minimum royalty of $200

a month for the right to operate from the claims.

Thus, to the lessors, the annual income from the

claims would be the $2,400 per year rental. It is, of

course, true that the rental was based on the right

to mine all of the claims. But in point of fact, the

Brawner operation at the critical date was primarily

limited to Claim No. 10, and the valuation he put

on its worth by limiting his activities to its area,

while obligating himself to the full annual rental,

is certainly probative of the claim’s real market-

ability.

The government further contends that even grant-

ing the marketability of the material on Claim No.

10 as of July 23, 1955, this marketability was lost

——

5la

between that date and the initiation of the contest

proceedings. On this point the Judge found that:

* * * there has been a market for the material

from Claims 9 and 10 since 1955. What was

lacking was not a market, but an operator-

lessee with the proper equipment to produce the

material.

The government contends that there was no pro-

duction from 1957 to 1965. The government’s witness

Fisher testified, however, that during 1959 and 1960

Frank R. Sullivan, who in 1959 had acquired the

claims from the original locators, was reported “* * *

to have produced and stockpiled considerable amounts

of sand and gravel on the claims. * * *” Fisher sub-

sequently related a conversation with Sullivan in

which the latter declared that the material removed

“* * * was used when he had the claims for roofing

granules at Nellis Air Force Base.” Further, the

lack of production from 1960 to 1963 was adequately

explained by Young as the result of internal fric-

tion within Morrison-Knudsen, and certainly the con-

tract negotiations between Charleston Stone Prod-

ucts, Inc. and Stocks Mill and Supply Co. and Arden

Sand and Gravel, culminating in a beneficial agree-

ment, have not worked a termination of the market

for the material from Claim No. 10. Thus, there was

no loss of market as regards Claim No. 10, and ac-

cordingly, we find that the Judge correctly validated

Claim No, 10.

52a

The government also argues that the Judge er-

roneously validated Claim No. 9 as a source of re-

serve material. Two points are salient on this issue.

The Judge had already found that 5,000 cubic yards

of material were mined annvally from Claim No. 10,

with some overlap into Claim No. 9. It is stated

in the record that the estimated reserves on Claims

Nos. 9 and 10 are in excess of 1,000,000 cubic yards

of useable material. At the rate of removal occurring

in 1955, the Judge’s decision provides as a reserve a

200-year supply. This is far in excess of the reserve

normally granted, see United States v. Robert E.

Anderson, Jr., 74 I.D. 292 (1967). Even utilizing

the Judge’s stated rationale it is difficult to see how

Claim No. 9 could be validated as a source of re-

serves,

A more basic problem is, as was pointed out by

the Government, the Judge’s misunderstanding of 43

CFR 3711.1(b), as it relates to reasonable reserves.

A claim is not validated as a reasonable reserve;

rather, the presence or absence of a reasonable re-

serve within the claim is looked to in determining the

present marketability thereof. See United States v.

William A. McCall and R. V. Kaltenborn, 1 IBLA

115, 122 (1970). There must be independent evi-

dence of the present marketability of a claim held as

a reserve in order to validate that claim. United

States v. Neil Stewart, 5 IBLA 39, 55 (1972). Thus,

Claim No. 9 must rest upon its own factual situation

and the Judge’s validation of it “as a source of re-

serve material” must be set aside. If it is to be vali-

53a

dated, it must have independent marketability. For

reasons elaborated, infra, we believe that it does not

and therefore to this extent the Judge’s decision must

be reversed.

The Judge also found that the contestee had not

established marketability as of July 23, 1955, for

any of the remaining Charleston placer claims.

Contestee admits that there was no evidence of

actual sales as regards the Charleston, and Charleston

Nos. 1, 2, 3, 5, 18, 19, 20, and 22.

The contestee argues that leach rock was quarried

on Claim No. 8, but no testimony was adduced on

this contention. Contrary to contestee’s interpretation

both contestant’s Exhibit 6 and contestee’s Exhibit

X-4 support the government witness Fisher’s state-

ment that the quarrying occurred at the southwest

corner of Claim No, 10 and outside of the northeast

corner of Claim No. 8. It is, of course, obvious that

the “face” of the deposit continues into Claim No. 8,

but there is, in the record, no evidence of any mining

of leach rock from Claim No. 8. As regards the testi-

mony of Mr. Wheeler, it is to be noted that it was

stipulated by counsel for both parties that leach rock

has a useful life of approximately 15 years. The

demand for leach rock is limited to that amount

needed to supply nearby sewage and water filtration

plants, a market which is both limited and of in-

frequent recurrence, Cf. United States v. Clark

County Gravel, Rock and Concrete Company, A-31025

(March 27, 1970) as regards the supply of volcanic

or leach rock in the Las Vegas area. We have noted,

54a

supra, that the marketability requirement as it re-

lates to minerals withdrawn from location is a con-

tinuing one, and while it may be difficult to draw a

precise line delineating at what point the loss of a

market has negated a prior discovery, it is obvious

from the facts of the instant case that such a loss oc-

curred here. Since relocation of the claim is im-

possible, the proposed expansion of the filtration sys-

tem in the area which coincided with the contest

proceedings would be insufficient to revive a claim

predicated on the presence of leach rock thereon.

Therefore, these removals may not properly be con-

sidered in the determination of the marketability of

the deposits in Claims Nos. 4, 6, 16, 17 and 21.

The removals by Vernon Frehner occurred in 1956.

Accordingly, they may not properly be considered as

to the issue of marketability at the critical date of

July 23, 1955.

Stocks testified that his purchases of materials

terminated in 1948. Contestee argues that because

of his advanced age, Stocks was mistaken as to the

dates involved. It seems to us somewhat anomalous

to argue that Stocks could err up to seven years as

regards the time element and then go on to contend

that his testimony is sufficiently accurate in reference

to the location of the mining activities so as to vali-

date Claims Nos. 8, 11, 12, 14 and 15. Be that as it

may, Stocks repeatedly testified that he had no access

to the claims after 1948 and his testimony as to the

withdrawals can only be given weight in relation to

the dates he has insisted on.

55a

Jacka’s testimony referred to Claims Nos. 13, 13A

and 14. Claim No, 138A, of course, has already been

deemed void ab initio since it was not located until

after the passage of the Act of July 23, 1955. Jacka,

however, at one point declared that he bought no

material until 1956 and another time declared that

Brawner was the low bidder for supplying chips to

the city of North Las Vegas from 1954 to 1958.

This apparent contradiction in testimony can only be

reconciled by assuming that though Brawner was

the low bidder, no actual purchases were made until

1956. This is in accord with Jacka’s statement con-

cerning a flood in either 1954 or 1955, the aftermath

of which prevented resurfacing work from going

forward. Accordingly, no actual sales have been

proved from the claims at the critical date. The other

testimony as regards extractions was too general to

be efficacious in determining the locus of actual sales

occurring prior to the critical date.

Actual sales, however, are only one indicium of

marketability. Other relevant criteria are bona fides

of development and distance to the market. As of

1955 the distance to the market from the main pits,

approximately 15 miles, appears excessive. Certainly

the distance cannot be said to weigh positively on the

side of marketability. Furthermore, bona fides in de-

velopment occurred only in Claim No. 10.* Bona fides,

* It is to be noted that much of the evidence adduced at the

hearing related to present developmental intentions. However

relevant such plans may be to the issue of marketability at

the time of the contest proceedings, they cannot be said to

56a

like marketability, must be related to specific claims,

and contestee cannot successfully apply the bona fides

shown as regards No. 10 to validate the other claims.‘

Considering the market demand and the supply

available for that market as of July 23, 1955, we

find that the contestee has not met the burden of

proving marketability as to the claims other than

Claim No. 10.

We have also considered the evidence in light of

the recent decision of the Ninth Circuit Court of Ap-

peals in United States v. Verrue, 457 F.2d 1202

(1972). We note that its rationale is inapplicable

to the case at bar. In Verrue the Court validated

the contested claim because there was no controver-

sion of appellee’s evidence that the “material on

Sandy No. 2 was marketable at a profit” during the

relevant period. Jd. at 1204. Thus, the opinion in

that case was directed to a contest of a single claim.

bear on the issue of marketability as of July 23, 1955. Since

we have decided that there was no showing of marketability

as of the date of withdrawal of sand and gravel from mineral

location, it is unnecessary to examine the question of whether,

and to what extent, marketability was shown as of the date of

the initiation of the proceedings.

* Contestee protests that this decision would leave him with-

out a water supply. While this may well be the case, it is

nevertheless impossible to validate a claim simply because

the contestee needs it for the more economic workings of a

valid claim. Claim No. 22, on which the well is located, must

stand or fall on the merits of its discovery. Having deter-

mined that there was no valid discovery thereon, supra, the

mere fact that there is now a producing water well on the

claim will not nullify the absence of a valid discovery. -

57a

This case, on the other hand, involves twenty-five

different claims. The only clear statement as to

marketability at the critical date is found in the depo-

sition of Starr Hill, Jr. He declared that he con-

sidered all the Charleston claims to be valid.

This simple statement, however, cannot be used to

validate all twenty-five claims. All that it can fairly

be said to indicate was that there was an existing

market, at the critical date, for sand and gravel from

some of the claims embracing the deposit. To the

extent that this declaration has reference to Claim

No. 10 we agree. But it cannot be said that Hill

had advertence to each of the twenty-five claims when

he made his statement; the very next question asked

was whether he agreed “* * * that the deposit en-

compassed by the claims was a valid mineral deposit

under the mining laws?” To which Hill answered,

“Ves,”

It seems clear that Hill was utilizing the theory,

advanced by the contestee, that the establishing of the

validity of one claim on a single deposit has the effect

of validating all claims on that deposit. We have re-

jected this position for the reasons stated, supra.

Another crucial difference between the case at bar

and that in Verrue is that the latter case does not

encompass the issue of loss of market after a valid

location, but is merely limited to the question of the

marketability of the claim at the critical date. In

the instant case sales, developmental work, etc., on

all of the claims, with the exception of Claim No.

10, occurred infrequently and intermittently. Thus,

58a

even if a finding of marketability as of July 23,

1955, were mandated by the Verrue decision, subse-

quent events provide ample proof that the market-

ability had been lost and could not be regained, for

the reasons discussed, supra. Therefore, the Verrue

case does not, by any realistic reading, require the

validation of all of these claims.

Appellant has requested oral argument. The is-

sues in this case, however, have been extensively

briefed by both parties before the Judge and again

before this Board. Oral argument would therefore

serve no useful purpose and it is hereby denied.

Therefore, pursuant to the authority delegated to

the Board of Land Appeals by the Secretary of the

Interior, 43 CFR 4.1, the decision of the Administra-

tive Law Judge is reversed as to its holding that the

Charleston No. 9 placer mining claim is valid, and is

affirmed as to its holding that the Charleston No. 10

placer mining claim is valid, and the Charleston, and

the Charleston Nos. 1-8, 11-22, 12A and 138A placer

mining claims are invalid.

/s/ Douglas E. Henriques

DouGLas E. HENRIQUES, Member

We concur:

/s/ Joseph W. Goss

JOSEPH W. Goss, Member

/s/ Martin Ritvo

MARTIN RITVO, Member

59a

APPENDIX E

[SEAL]

UNITED STATES

DEPARTMENT OF THE INTERIOR

Office of Hearings and Appeals

Interior Board of Lard Appeals

4015 Wilson Boulevard

Arlington, Virginia 22203

ROBERT L. BEERY, et al.

IBLA 76-354 Decided June 28, 1976

Appe.. from decision of California State Office,

Bureau of Land Management, rejecting patent ap-

plication CA 3206 and declaring two mining claims

null and void.

Affirmed.

1. Mining Claims: Generally—Mining Claims:

Locatability of Mineral: Generally—Mining

Claims: Specific Minerals Involved: Water

Water is not a mineral which is locatable un-

der the general mining law.

2. Mining Claims: Generally

The bottling and distribution for sale of spring

water for human consumption does not con-

stitute the making of a valuable mineral de-

posit under the general mining law.

3. Mining Claims: Withdrawn Lands—With-

drawals and Reservations: Effect of

Mining claims located on land withdrawn from

60a

all forms of entry are null and void from the

beginning.

4. Withdrawals and Reservations: Springs and

Waterholes

Even though springs and waterholes withdrawn

from mineral entry by Executive Order 107

may not be in use, they nevertheless remain

withdrawn so long as they provide sufficient

water for public watering purposes.

APPEARANCES: Robert L. Beery, Esq., San Fran-

cisco, California, for appellants.

OPINION BY

ADMINISTRATIVE JUDGE STUEBING

Robert L. Beery and others appeal from the No-

vember 10, 1975, decision of the California State

Office, Bureau of Land Management (BLM), reject-

ing their patent application (CA 3206) for two

placer mining claims and declaring both claims to be

null and void. The mining claims known as the

Chemise Springs and South Chemise Springs placer

mining claims, are situated in sections 30 and 31,

T. 5 S., R. 2 E., Humboldt Meridian, California. The

California State Office rejected both claims for two

reasons. First, the claims were located on land which

was withdrawn from mineral entry. Second, the pur-

ported discovery is of “natural mineral spring water,”

a substance held to be not locatabie by an earlier de-

cision of this Department.

Appellants assert that the land was not actually

withdrawn from mineral entry. Moreover, they ar-

6la

gue, since mineral spring water is widely considered

to me a mineral, it should be locatable under the

general mining law, 30 U.S.C. $21 et seg. (1970).

Its value, they assert, lies in the fact that the spring

water may be bottled and sold at a profit for human

consumption.

[1] This Department long ago held that mineral

spring water is not locatable under the general min-

ing law. Pagosa Springs, 1 L.D. 562 (1882). In

that case, Secretary Teller stated:

Many springs and many waters are impreg-

nated with minerals held in solution; but it does

not follow that the lands bearing such waters

are mineral lands, and can be patented as such.

Lands of a saline character are an exception, and

are expressly provided for in the laws relating

to the disposition of the public lands. Lands con-

taining mineral springs not of a saline character

are subject to sale under the general laws, and

not under the acts relating to the sale of mineral

lands. * * * [Citation omitted. ]

In a second case arising only a year later, Secre-

tary Teller stated:

Where it is evident that an application for a

placer claim is in fact an attempt to secure a

patent for a water right the application will be

rejected.

William A. Chessman, 2 L.D. 774 (1883). While

this case deals with water generally, instead of min-

eral spring water, specifically, the principle is still the

same: water is not a mineral which is locatable un-

der the general mining law, and an application for

patent to a placer mining claim which is perceived

to be an attempt to acquire a water right must be

rejected.

Another case involving mineral water is United

States v. Springer, 8 IBLA 123 (1972), affd, 491

F.2d 239 (9th Cir. 1974), cert. denied, 419 U.S. 834

(1975). In that case there were mineral springs on

6 of the 10 mining claims involved. Some of the

water was evaporated, leaving mineral salts which

were then packaged and “hawked” through Dr.

Springer’s religious radio programs. Some of the

water was also used for bathing purposes. Dr.

Springer believed that the mineral salts and mineral

water had medical benefits. While the locatability of

the mineral water was not directly in issue in that

case, it is clear that the Court of Appeals for the

Ninth Circuit did not consider these activities to be

mining within the meaning of the law. The opinion

by the Court of Appeals noted that some of the

mineral spring water was bottled and distributed

gratis, and other water from the claimed springs was

used for therapeutic baths. Although the water was

not sold for a price, contributions were solicited.

In United States v. Union Oil Co. of Calif., 369 F.

Supp. 1289 (D. N.D. Calif. 1976), the Court held

that a reservation of “coal and other minerals” to

the United States on lands patented under the Stock-

raising Homestead Act did not include a reservation

of geothermal steam and other geothermal resources,

since they are not “minerals” within the meaning of

63a

the Act. The Court noted that the strong weight of

“authority is that water was not considered to be a

mineral when the legislation was enacted in 1916. At

1297."

The most recent reference by this Board to the

locatability of mineral water appears in United States

v. Bienick, 14 IBLA 290, 297 (1974), where, in a

special concurrence, it was noted that among ma-

terials held to be not locatable was mineral spring

water, citing Pagosa Springs, supra.’

If we are to pay more than lip service to the doc-

trine of stare decisis we must adhere to those cases,

unless there is some compelling reason to the con-

trary. Appellants argue that because mineral spring

water is widely considered to be a mineral, it should

be locatable pursuant to section 1 of the Act of May

10, 1872, as amended, 30 U.S.C. § 22 (1970). That

act provides that all valuable mineral deposits in pub-

lic domain lands are open to exploration and pur-

chase. Appellants’ argument is not persuasive for

* Appeal pending. However, even were the ruling in Union

Oil reversed, it would not alter our conclusion in this case, as

all minerals which may be included in a patent reservation

are not necessarily locatable under the mining law. See dis-

cussion of non-locatable minerals, infra.

* The decisions in United States v. Gray, A-28710 (May 18,

1962); A-28710 (Supp., May 7, 1964); A-28710 (Supp. II,

April 6, 1965), do not concern the locatability of mineral

spring water. What was at stake were deposits of mineral

salts which were used to make mineral water. The issue was

not whether the “manufactured” mineral water was locatable,

but whether the mineral salts used in the manufacture were

locatable. The claims were held invalid in that case.

64a

several reasons. First, whether water is considered a

mineral generally depends on the context. Second, not

all minerals are locatable under the general mining

law. Third, even salt springs were never disposable

under the Act of May 10, 1872. See Opinion, 49 L.D.

502 (1923). Fourth, Congress could not have in-

tended for water to be locatable under the mining

law.

In support of their argument that water is mineral,

appellants have cited a number of cases. The lead

case is United States v. Shurbet, 347 F.2d 103 (5th

Cir. 1965). In that case, the Court of Appeals for

the Fifth Circuit did say in dictum that water in the

North Texas area is a mineral. Jbid. at 107. How-

ever, the issue in that case is whether water is a

“natural deposit” within the meaning of section 611

of the 1954 Internal Revenue Code, 26 U.S.C. § 611

(1970). That section deals with cost depletion for

mining. The court held that water in the “high

plains” area of North Texas is such a deposit. That

finding in no way turned on water being classified as

a mineral. The only California case cited is Corn-

well v. Buck & Stoddard, 28 Cal. App. 2d 333, 82

P.2d 516, 518 (2d Dist. Ct. App. Cal. 1938), where

the court stated:

Minerals are usually solids. The only ones

which are liquids at ordinary temperatures being

water and mercury.

As with the previous case, the statement was pure

dictum. The issue was whether oil and gas drilling

equipment, for tax purposes, should be considered

65a

mining equipment. Notwithstanding the dicta in

some cases, there are cases construing deeds finding

water to be a mineral; there are also many to the

opposite effect. See, e.g., Stephens Hays Estate Inc.

v. Togliatti, 85 Utah 137, 38 P.2d 1066 (1934), where

a solution of copper and water was found not to be a

mineral in a deed conveying all minerals in or on

the land; Vogel v. Cobb, 193 Okla. 64, 141 P.2d 276

(1943), where “other minerals” in a deed did not

include water even though in a technical sense it may

be thought of as a mineral; Sun Oil Co. v. Whitaker,

412 S.W.2d 680, 684 (Tex. Civ. App. 1967), aff'd

424 S.W.2d 216 (Tex. 1968).

Even if water were held to be a mineral it does not

necessarily follow that it is locatable under the gen-

eral mining law. In Northern Pacific Ry. Co. v.

Soderberg, 188 U.S. 526, 530 (1903), the Supreme

Court stated:

The word “mineral” is used in so many senses,

dependent upon the context, that the ordinary

definitions of the dictionary throw but little light

upon its signification in a given case. Thus the

scientific division of all matter into the animal,

vegetable or mineral kingdom would be absurd

as applied to a grant of lands, since all lands

belong to the mineral kingdom, and therefore

could not be excepted from the grant without be-

ing destructive of it.

As was pointed out in the spcial concurrence in

United States v. Bienick, supra, many minerals are

not considered locatable, even though a profit might

be made from their sale. Among these minerals are

66a

dirt, common clay, “fill” material, brick clay, peat,

certain limestone and “blow sand.” In discussing the

reasons why these materials are not locatable, we

apply Justice Holmes’ statement that, “A page of

history is worth a volume of logic.” New York Trust

Co. v. Eisner, 256 U.S. 345, 349 (1921).

What is loosely referred to as the “general mining

law” includes several] different laws enacted within a

decade of the Civil War. At the same time, this was

also the period when the American West was being

won by those ubiquitous heroes of contemporary

legend and entertainment—cowboys, soldiers, and par-

ticularly, miners and homesteaders. At that time

land was classified by the General Land Office as

being either mineral land or agricultural land. Min-

eral land could be entered only under the mining

laws; agricultural land could be entered only under

the agricultural land laws, such as the homestead

and desert land entry acts. Also during this period

the Congress was awarding grants of non-mineral

land to the states and to the railroads. If all those

substances which are quite literally “minerals,” such

as common dirt, were locatable under the mining

law, there could have been no entry under the home-

stead or other agricultural entry laws, nor any land

grants to states and railroads, as all land would then

have been “mineral land.” This was the Depart-

ment’s point in Holman v. State of Utah, 41 L.D.

314, 315 (1912):

It is not the understanding of the Department

that Congress has intended that lands shall be

67a

withdrawn or reserved from general disposition,

or that title thereto may be acquired under the

mining laws, merely because of the occurrence of

clay or limestone in such land, even though some

use may be made commercially of such materials.

There are vast deposits of each of these materials

underlying great portions of the arabie land of

this country. It might pay to use any particular

portion of these deposits on account of a tempo-

rary local demand for lime or for brick. If, on

account of such use or possibilities of use, lands

containing them are to be classified as mineral,

a very large portion of the public domain would,

on this account, be excluded from homestead and

other agricultural entry. It is safe to say that

every kind of material found in land in its natu-

ral state may under some circumstances be put

to non-agricultural uses. Local demand for build-

ing oi levees or railroad embankments, filling up

low places and the like, may make any particular

land more valuable for the time on account of

the material it contains than on account of its

agricultural possibilities, but it is clear that such

considerations can not be given weight in deter-

mining what lands are reserved for special dis-

position because mineral in character. In one

sense, all land except portions of the top soil is

mineral. The term, however, in the public-land

laws is properly confined to land containing ma-

terials such as metals, metalliferous ores, phos-

phates, nitrates, oils, etc., of unusual or excep-

tional value as compared with the great mass

of the earth’s substance.

Moreover, even though the need to have land avail-

able for homesteads may have diminished, there is a

68a

more compelling reason for continuing to hold that

certain minerals are not locatable. To hold otherwise

is to invite widespread abuse of the mining law.

Sand and gravel provide an excellent example on this

point. Prior to 1929 sand and gravel were not con-

sidered locatable under the general mining law. Sev-

eral ostensible reasons were given for that holding

in Zimmerman v. Brunson, 39 L.D. 310 (1910).

Though not stated until 1933, the Department’s real

objection was the ease with which one could obtain a

patent to public land for uses other than mining

merely by asserting that the land was valuable for

sand, gravel, or other minerals of widespread occur-

rence, Solicitor’s Opinion, 54 I.D. 294, 296 (1933).

Nevertheless, the Department ignored these fears

which turned out be all too prescient. Between 1929,

when sand and gravel was first held to be locatable,

and 1955, the abuse of the mining law by sand and

gravel claimants seeking title to public land for pur-

poses other than mining became so offensive that the

Congress, with the support of the mining industry,

finally removed sand, gravel, and certain other com-

mon minerals of widespread occurrence from locat-

ability under the mining law. Act of July 23, 1955,

30 U.S.C. §§ 611-615 (1970). Because of the wide-

spread occurrence of water, the Department would

be inviting a repeat of the abuses attending the lo-

catability of sand and gravel, if it were to hold water

locatable.

Even if these difficulties could be surmounted, it is

nevertheless clear that Congress could not have in-

69a

tended that water be locatable. Through the enact-

ment of three different provisions coetaneous with

the enactment of the mining law, it is apparent that

Congress intended that water should be severed from

the public domain and acquired in accordance with

the laws of the various western states. The first of

the three provisions is section 9 of the Act of July

26, 1866, 30 U.S.C. §51 (1970), part of the general

mining law. Essentially, this provision recognized

rights which had accrued under the appropriation

system and provided for rights of way for ditches

and canals. The recognition of rights under the ap-

propriation system was approval of the severing of

water from the public domain. The second provision

dealing with water is section 17 of the Act of July 9,

1870, as amended, 30 U.S.C. §52 (1970), also part

of the general mining law. That act provides that all

patents to public lands would henceforth be subject

to the provisions of section 9 of the Act of July 26,

1866, 30 U.S.C. §51 (1970). The third provision is

section 1 of the Act of March 3, 1877, as amended, 43

U.S.C. § 321 (1970), part of the desert land entry

laws. The Supreme Court discussed at length the ef-

fect of the three provisions in California Oregon

Power Co. v. Beaver Portland Cement Co., 295 U.S.

142, 154-56 (1935). It concluded with respect to the

last provision :

As the owner of the public domain, the govern-

ment possessed the power to dispose of land and

water thereon together, or to dispose of them

separately. Howell v. Johnson, 89 Fed. 556, 558.

70a

The fair construction of the provision now under

review is that Congress intended to establish the

rule that for the future the land should be pat-

ented separately; and that all non-navigable

waters thereon should be reserved for the use of

the public under the laws of the states and terri-

tories named. The words that the water of all

sources of water supply upon the public lands

and not navigable “shall remain and be held free

for the appropriation and use of the public” are

not susceptible of any other construction. The

only exception made is that in favor of existing

rights; and the only rule spoken of is that of

appropriation. It is hard to see how a more defi-

nite intention to sever the land and water could

be evinced. [Emphasis added. ]

295 U.S. at 162.

There is only one conclusion that can be drawn

from the preceding statement. Because the usufruc-

tuary right to water was to be disposed of in accord-

ance with state law, it could not at the same time be

disposed of under the general mining law. Moreover,

because two of the three statutory provisions severing

the water from the land were enacted as part of the

general mining law, it seems fairly clear that Con-

gress had no intention of disposing of water under

other provisions of the mining law.

Therefore, we adhere to previous decisions of this

Department holding that water or mineral water is

not a mineral which is locatable under the general

mining law. Pagosa Springs, supra; William A.

Chessman, supra; United States v. Bienick, supra.

Tla

[3] As previously noted, appellants also challenge

the finding by the BLM that the land in question was

and is withdrawn from entry under the mining law.

The California State Office held in its decision:

By Executive Order No. 5237 of December 10,

1929 all of the unreserved public lands in T. 5

S., R. 2 E., H.M. were temporarily withdrawn

for classification. Subsequently, the King Range

National Conservation Area was established by

Secretarial Order of September 21, 1974 under

the Act of October 1, 1970 (84 Stat. 1067; 16

U.S.C. 460y) and Executive Order No. 5237 was

revoked in accordance with Sec. 8 of the Act.

Therefore, at the time of the purported loca-

tions and amendments thereto of the Chemise

Springs placer mining claim on September 27,

1970 and June 25, 1972; and the South Chemise

Springs placer mining claim on September 26,

1970 and June 25, 1972 the land was effectively

withdrawn from location by Public Water Re-

serve No. 107 and Executive Order No. 5237 and

the claims are hereby declared null and void ab

initio.

It is important to note at this point that both claims

were located in 1970; amended location notices for

each claim were filed in 1972 and 1975. It is clear

that E.0. 5237 was revoked by section 8 of the Act

of October 21, 1970, 16 U.S.C. § 460y-7 (Supp. IV

1974), as of the date of Secretarial Order establishing

the King Range National Resource Area, September

21, 1974. Any claim located prior to that time was

null and void from the beginning, as mining claims

T2a

may not be located on land closed to mineral entry.

John Boyd Parsons, 22 IBLA 328. (1975) ; Russ Jour-

nigan, 16 IBLA 79 (1974); Albert Gardini, A-30958

(October 16, 1968); Leo J. Kottas, 73 ID. 123

(1966) ; aff'd sub nom. Lutzenheiser v. Udall, 432 F.

2d 328 (9th Cir. 1970). Therefore, only the 1975

location notices remain in issue, as the previous no-

tices were of no effect.

[4] Appellants contend that Executive Order 107

of April 17, 1926, 48 CFR 2311.0-3, 43 U.S.C. § 300

(1970), does not bar mining in this area. They coi-

tend that the order never applied to these lands be-

cause it was never noted on land office records. That

argument is not persuasive as the withdrawal has

been a matter of public record since its promulgation.

See, e.g., Instructions, 51 L.D. 457 (1926); 43 CFR

292.1, 2,3 (1938) ; 48 CFR 2321.1-1 (1969) ; 43 CFR

2311.0-3 (1976).* See also the discussion of this point

in John V. Hyrup, 15 IBLA 412, 415-16 (1974).

Appellants argue in the alternative that the land

is unlikely to be used for watering because the springs

are either too small or too inaccessible to be used for

watering purposes. Appellants speak of a “modest”

® Actually, the withdrawal does not appear in land office

records under the “Index to Miscellaneous Documents, Docu-

ments Applying to Lands Not Specifically Described on Which

Conditions Restricting Disposal or Use May Exist.”

* Reversed on other grounds sub nom. Hyrup Vv. Kleppe, 406

F. Supp. 214 (1976), appeal pending.

’ Although appellants assert that the waters from the sub-

ject springs are healthful, it is not clear whether the waters

have any restorative powers. In the Statement of Reasons at

3a.

quantity of water and state that the flow is “totally

insufficient” for the stated purpose of the withdrawal

—stock . watering. According to appellants’ patent

application, they plan to bottle 840 gallons of water

per day. That amount is certainly sufficient for public

watering purposes. The principal criterion for with-

drawal is whether there is sufficient water for possi-

ble use. See Frank Rauzi, A-28602 (August 15, 1962).

Therefore, pursuant to the authority delegated to

the Board of Land Appeals by the Secretary of the

Interior, 43 CFR 4.1, the decision appealed from is

affirmed.

/3/ Edward W. Stuebing

EDWARD W. STUEBING

Administrati

tk seins istrative Judge

/s/ Joseph W. Goss

JOSEPH W. Goss

Administrative J udge

/s/ Martin Ritvo

MARTIN RITVO

Administrative Judge

6, appellants describe the springs as “substantially mi

ized.” However, in that context it is noteworthy that —

smallest legal subdivision of the public land which * * * con-

tains a hot spring, or a spring the waters of which possess

curative properties; and all the land within one-quarter mile

euch spring located on unsurveyed land be * * * withdrawn

rom settlement, location, sale, or en ’

lease * * *.” 43 CFR 2311.0-8(b). ee eee

@ ©. 6. covesewenr reurime orrice; 1977 245081 57