Petition — California ex rel. Department of Transportation v. Doria Mining & Engineering Corp.
Supreme Court brief1980
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Oumrt, U.
EILED
JAN 25 1980
RODAK, JR., CLER
IN THE
Supreme Court of the United §
October T 979
NO, ....0. “11 50
THe STATE OF CALIFORNIA, acting by and through the
Department of Transportation, and CALNEV PIPE-
LINE COMPANY, a Corporation,
Petitioners,
VS.
DortA MINING AND ENGINEERING CORPORATION, a Cor-
poration, Ceci, D, ANDRUS, etc., et al.,
Respondents.
Petition for Writ of Certiorari to the United States
Court of Appeals for the Ninth Circuit.
RICHARD G, RYPINSKI,
Chief Counsel,
JOSEPH A. MONTOYA,
ROBERT W, VIDOR,
120 South Spring Street, Suite 500,
Los Angeles, Calif, 90019,
(213) 620-5000,
Aittorneys for Petitioner State of California,
REID, BABBAGE & COIL,
RICHARD A, BROWN,
DAVID G. MOORE,
P.O. Box 1300,
3800 Orange Street,
Riverside, Calif. 92502,
(714) 682-1771,
Attorneys for Petitioner
Calnev Pipeline Company.
January 22, 1980,
Parker & Son, Inc., Law Printers, Los Angeles. Phone 724-6622
SUBJECT INDEX
Page
Opinions and Decisions Helow ... so
Jurisdiction .........0.. oor
Questions Presented ....:::::sssssscsssersserseeee: er
Statutes Which the Case Involves 4
Statement of the Case ...cccccssssccssessesees A
Reasons for Granting the WEIt ccc mene
I,
Where the Administrative Kecord as a Whole
Clearly Supports the Ageney Deeision and
Where the Alleged lraud as to Whieh Judicial
Review Is Sought Does Not Keach the Core
of a Case nor the Ageney Decision, Keview
Should Be Denied in the Interest of Vinality
of Decisions and Avoidanee of Trials De Neve
in the District Courts .
I,
Where the Alleged Tainted Lvidence Does Not
Go to the Core of 4 Mining Contest and Where
Other Evidence in the ecard Amply Supports
the Agency Decision, the Integrity of the Prog:
ess Is Not so Compromised as to Require a
Hearing on Charges of Hraud -"
CN ic cciscasterccncisenescen
Appendix A. Opini0fi 9c ADD Dp
Appendix B. Memoranduin of Decision Granting
Defendants’ Motion for Summary Judgment |
16
19
10
ii,
Page
mom C, Bossa by Administrative ete
SUNININ Yc detclicsscnaicnsiitabcideesteataseiemiuatidensinidusdsisinne 40
Appendix D, 28 USC, § VSGECA) ccc 42
Appendix BH, 30 U.S.C, § 22 ccc 48
BO U.8.C, 8 OS scsccsrsssessssrsssccscessssscscscsersccerecsesess As
40 USC, § 61 seetathedeaianabaiennd tiencldiphameics 8
Appendix FF, 8 UGC, § 706 ccccccccccsceseersreeneeeen AS
iil,
TALE, OF AUTHORITIES CITED
Cases Page
Andrus v, Charlestone Stone Prods, Co,, 446 US,
OS CRS iserrrccediteserthencdiadtdtharievisinsth atin ae dad: G
Clear Gravel Unterprises, Ine, V, Keil ie Cir,
ABTG)., FOG: FBG AOD scrsrsrctsisiscrscivisissecsdanvatienyecs 14
Communist Party of the United States y, died
Activities Control Hoard, 451 U.S, 115 (1956) .. 16
Havel-Atlas Glass Co, vy, Hartford Umpire Ca,, 922
Humboldt Placer Mining Co, vy, See'y of the Dept,
of Interior (8th Cir, 1977) 549 F.2d 622... 18, 17
_ Interstate Investors, Ine, vy, United States, 287 FF,
Bupp, 374 (GDN: Y, 1968) scccccrssssesscsersseeenel, 19
Multiple Use Ine, y, Morten (Oth Cir, 1974) 504
1,24 AAW. SEecrgare SELTLTELLLLLRALELA CLEC LL ELSES RE REESE LE RRS LTE Eeaeess 10
Standard Oil Co, v, Montedison, SpA (4d Cir,
1976) 5A0 2d 61 SECECTCLELTELLLLLTRTESSES Se eeeeE TSCKTLELEEE II
United States vy, Coleman, 490 U8, 599 (1968) ne a0
United States v, Shotwell Manufacturing Co,, 455
US, 245 (1957) SLELECECLLTSTLELSSE LER EERE SESS eeeeeeieececegaee 16
Universal Camera Corp, vy, NLRG, 340 U8, 474
Regulations
Code of Vederal sbhawactaann Title 44, See, 4.45061
Itules
iv,
Statutes Page
United States Code, Tithe 5, Sees, 701°706 ...4, 5, 6
United States Code, ‘Tithe 5, See, 706(2)(1) 10
United States Code, Tithe 24, See, 1254(1) 2
United States Code, Tithe 24, See, 1441 », 6
United States Code, Tithe 24, See, 1441(a) 3
United States Code, Tithe 24, See, 2200 5
United States Code, Tithe 40, See, 22 3
United States Code, Title 40, See, 45 3
United States Code, Tithe 40, See, 611 3
United States Code, Title 45, See, 146 11
IN THE
Supreme Court of the United States
October Term, 1979
Pe ale the
THE STATE OF CALIFORNIA, acting by and through the
Department of Transportation, and CALNEV PIPE-
LINE COMPANY, a Corporation,
Petitioners,
vs.
DortiA MINING AND ENGINEERING CORPORATION, a Cor-
poration, Ceci, D. ANDRUS, etc., et al.,
Respondents.
Petition for Writ of Certiorari to the United States
Court of Appeals for the Ninth Circuit.
Petitioners, the State of California, acting by and
through the Department of Transportation and Calnev
Pipeline Company, a corporation, hereafter jointly re-
ferred to as “Petitioners,” pray that a Writ of Certiorari
issue to review the judgment and opinion in the above-
entitled cause of the United States Court of Appeals
for the Ninth Circuit.
The principal respondent herein is Doria Mining
and Engineering Corporation, a corporation (hereafter
“Doria” ). Respondents Cecil D. Andrus, Secretary of
the Interior, Douglas Leisz as Regional Director of
the United States Forest Service and Harold Mitchell
as Acting Forest Supervisor of the San Bernardino
National Forest (hereafter, the “federal respondents’)
were appellees below, but did not join in the Petition
ak, Wes
for Rehearing of the Opinion of the Court of Appeals,
and have not joined in this Petition. Federal respond-
ents, like Doria, have a continued interest in the out-
come of this case by reason of the intervention of
the United States in the mining contest proceeding
more fully described infra.
Opinions and Decisions Below.
The Opinion and Judgment of the Court of Appeals
for the Ninth Circuit, not yet reported, appears in
Appendix “A” of this Petition.
The Memorandum of Decision of the District Court
for the Central District of California Granting Defend-
ants’ Motion for Summary Judgment is reported at
420 F.Supp. 837. A copy of said Decision appears
in Appendix “B” of this Petition.
The decision of the United States Department of
Interior Board of Land Appeals (hereafter “IBLA”)
which affirmed the decision of an Administrative Law
Judge declaring respondent Doria’s 18 unpatented plac-
er mining claims null and void for lack of discoveries
of valuable mineral deposits, is reported at 17 IBLA
380-401. A copy of said IBLA decision, with headnoies
omitted, appears in Appendix “C” of this Petition.
Jurisdiction.
The Judgment of the Court of Appeals for the
Ninth Circuit was entered on November 2, 1979. A
timely petition for rehearing filed by Petitioners was
denied on December 19, 1979, and this Petition for
Certiorari was filed within 90 days of said date.
The jurisdiction of this Court is invoked under 28
U.S.C. § 1254(1).
eee
scellies
Questions Presented.
1. Whether, in an action for judicial review
of an agency decision invalidating mining claims,
the alleged newly discovered evidence of fraud
on the agency tribunal, aliunde the administrative
record, but intrinsic to the agency hearing, is
sufficient to warrant consideration by the Court
where the record as a whole reveals no discovery
of valuable minerals was made by locators of
the claims.
2. Whether, in the action above-described, con-
sidering the administrative record as a whole and
disregarding certain evidence in the agency hearing
challenged as “tainted,” any injustice to a party
would result from the denial of a Motion to Amend
a Complaint for judicial review to allege newly
discovered evidence of fraud aliunde the record,
where the party’s own evidence at the hearing
failed to make a showing of discoveries of valuable
mineral deposits under the General Mining Law.
Statutes Which the Case Involves.
1. 28 U.S.C. § 1331(a) providing subject mat-
ter jurisdiction for the action below, set forth
in Appendix “D” hereof.
2. The General Mining Law of May 10, 1872,
as amended, in particular 30 U.S.C. §§ 22 and
35, and the Surface Resources Act of July 23,
1955, in particular 30 U.S.C. § 611, all as set
forth in Appendix “E” hereof.
3. The Administrative Procedure Act, 5
U.S.C. §§ 701-706 and in particular 5 U.S.C.
§ 706 set forth in Appendix “F” hereof.
elias:
Statement of the Case.
Since 1955 respondent Doria, or its predecessors,
claimed possessory interests in eighteen placer mining
claims located on federal lands in the Cajon Pass
region of the San Bernardino National Forest, San
Bernardino County, California.
On or about September 26, 1968, the United States
of America recorded a Highway Easement Deed to
the State of California which granted to the State
an easement over lands covered by the mining claims.
Pursuant to such recorded easement, the State entered
on portions of land covered by the mining claims
and constructed the freeway commonly known as Inter-
state 15.
On or about January 1, 1961, and again on or
about March 27, 1970, the United States Department
of Agriculture, Forest Service, issued certain Special
Use Permits to Calnev Pipeline Company (Calnev)
for the construction of pipelines across portions of
such federal lands. In 1970, Calnev, pursuant to such
Special Use Permits, entered upon and constructed
high pressure pipelines across portions of the mining
claims.
Both the easement deed granted to the State and
the Special Use Permits granted to Calnev were subject
to outstanding valid claims, if any, existing on the
dates of the grants. Neither the State nor Calnev ob-
tained permission from Doria or any of its predecessors
in interest to enter upon the property upon which
the mining claims were located.
Based upon the entries by Petitioners onto lands
covered by the mining claims, on or about December
10, 1970, Doria filed suit in the Superior Court of
ee ee eee ren =
em
the State of California for the County of San Bernar-
dino, against Calnev Pipeline Company, for trespass
and inverse condemnation in respect to the mining
claims. On January 5, 1971, Doria filed a second
suit in the Superior Court for San Bernardino County
against the State for trespass and inverse condemnation
in respect to the mining claims.
In 1972 Petitioners filed private contest No. R-
4873 in the Department of Interior pursuant to 43
C.F.R. §§ 4.450-1 et seq. asserting interests adverse
to Doria in the lands on which the claims were located
and alleging that the claims were invalid for failure
to discover any valuable mineral deposits within the
limits of the claims. Prior to the hearing on said
contest, the United States intervened on the side of
Petitioners as a contestant. After a six-day hearing
all 18 claims were declared null and void by Administra-
tive Law Judge Graydon Holt. Doria appealed the
decision to the IBLA and on or about October 31,
1974, the IBLA affirmed the decision (17 IBLA
380-401; Appen. “C” to Petition).
On March 12, 1975, Doria filed its Complaint in
the United States District Court, Central District of
California, for “Review of Decision Invalidating Min-
ing Claims and For Declaratory Judgment of Validity
and For Injunctive Relief.” [CR 1-9]. Doria alleged
jurisdiction pursuant to 28 U.S.C. § 1331, the Adminis-
trative Procedure Act (5 U.S.C. §§ 701-706) and
the Declaratory Judgment Act (28 U.S.C. §§ 2200
et seq.) [CR 2-3]. In answer to the Complaint,
Petitioners denied jurisdiction based on the Declaratory
Judgment Act, or on 28 U.S.C. § 1331 [CR 20,
lines 9-11; CR 27, lines 3-11]. Petitioners alleged
and the district court subsequently held that jurisdiction
ale
was based only on 5 U.S.C. §§ 701-706 (Memorandum
of Decision, Exh. “B”, p. 1).*
On April 28, 1975, Petitioners and the federal re-
spondents moved for Summary Judgment and dismissal
of Doria’s Complaint on the grounds that the entire
administrative record in Contest No. R-4873 supported
the IBLA decision declaring Doria’s mining claims
invalid and that moving parties were entitled as a
matter of law to have judgment entered affirming the
IBLA decision. A certified copy of the Administrative
Record was lodged with the district court as Exh.
“A” and decisions of the IBLA and the Administrative
Law Judge were attached as Exhs. “B” and “C” [CR
77-145]. Doria’s opposition to the motion filed on
July 30, 1975, did not establish by affidavits or other-
wise any genuine triable issue regarding “improper test-
ing methods and false factual premises” utilized by
Petitioners’ expert witness Schroter as alleged in Doria’s
complaint for review. Doria’s opposition was based
on its Memorandum of Points and Authorities, exhibits,
consisting only of copies of the administrative decisions,
and the “Records, Files and Transcripts of the Agency
Proceedings.” In opposition to the summary judgment
Doria challenged the propriety of the government’s
intervention in the private contest, the burden of proof
applied at the hearing and the sufficiency of the evi-
dence upon which the IBLA concluded there was no
discovery of feldspathic sands [CR 188-237].
After the motion was argued, and submitted for
decision, Doria filed on April 26, 1976, a Motion
1Puring pendency of the appeal from the judgment of
the district court, this Court held in Andrus v. Charlestone
Stone Prods. Co., 436 U.S. 604 (1978), that jurisdiction
was conferred by 28 U.S.C. § 1331, and not the Administra-
tive Procedure Act. Id. 607 at n. 6.
a ae
for Leave to Amend its Complaint on the ground
of Doria’s “recent discovery” on or about April 1, 1976,
that the agency cecision was “based on perjured and
false testimony” allegedly adduced by Petitioners in
the contest hearing. The Affidavits and Memorandum
in support of the Motion averred that exhibits in
evidence at the hearing showing results of tests run
on samples taken from Doria’s claims “substantially
vary and differ from the actual test sheets prepared
by the State laboratory;” that said exhibits materially
distorted the actual test results and that the State
laboratory in conducting the tests on the samples “failed
to comply with standard procedures established by the
State for all material testing laboratories.” Doria al-
legedly discovered this asserted misconduct after ob-
taining copies of all the test sheets showing results
of tests run on material from the Doria claims [CR
342, 345-349, 351-353]. The proposed amended com-
plaint generally alleged the discovery of “new evidence”
which showed that evidence presented by Petitioners
at the hearing was “inaccurate, misleading and false
and misrepresented the true facts” and that the IBLA
decision was “based on erroneous and false facts and
informatio knowingly introduced into said hearing by
defendants.” [CR 356].
Petitioners and federal respondents opposed the mo-
tion, pointing out inter alia that the alleged tainted
evidence related to a single exhibit, numbered 14A,
which was a compilation of results of tests run on
the claims for sand and gravel sufficiency at the request
of Petitioners’ witness Schroter; that the alleged “newly
discovered facts” pertaining to said Exhibit 14A were
not new but could readily have been ascertained and
delved into at the hearing through cross-examination
oe Se
of witness Schroter, that Doria had already obtained,
through State court discovery, copies of 10 laboratory
test sheets as early as November 1, 1975, and that
in any event as shown by the affidavit of Mr. Schroter,
filed in opposition to Doria’s motion, the data in Exhibit
14A accurately reported the results of tests run on
the samples as reflected in the original State materials
laboratory test sheets [CR 394-398].
After hearing the motion, the district court took
the matter under submission [CR 442]. As noted by
the Court of Appeals (Appen. “A”, p. 5, n.2) the
district court stated at the hearing that it did not
believe it had jurisdiction to consider matters extrinsic
to the administrative record. The district court also
stated it was about to circulate its decision on the
summary judgment motion, thereby doubting the timeli-
ness of Doria’s motion (Rep. Tr. Hrg. of 5-17-76,
p. 10).
While Doria’s motion to amend was pending Doria
filed, on May 27, 1976, another motion to “Supplement
the Record” regarding its motion to amend the com-
plaint, or in the alternative, to stay the court proceed-
ings pending Doria’s request for a rehearing before
the Secretary of Interior. Petitioners and federal re-
spondents moved to strike the motion as violative of
the court’s earlier ruling that the matter was to stand
submitted as of May 28, 1976. The district court
vacated the noticed hearing date of the second motion
[CR 494].
=
Thereafter, the district court filed its Memorandum
of Decision granting Defendants’ Motion for Summary
Judgment and entered summary judgment affirming
the IBLA decision [CR 505-510]. From said judgment
Doria appealed and the Court of Appeals rendered
its Opinion vacating the summary judgment and re-
manding to the District Court. The Court of Appeals
considered it necessary only to pass on whether the
district court erred in denying, on grounds of lack
of jurisdiction, Doria’s motion for leave to amend
its complaint. The Court held that the district court
may consider evidence outside the administrative record
in determining whether allegations of a fraud on the
agency are meritorious, and remanded for further pro-
ceedings, including consideration of the merits of Dor-
ia’s motion (Opinion, Appen. “A”, p. 5).
a WG
REASONS FOR GRANTING THE WRIT.
%
Where the Administrative Record as a Whole Clearly
Supports the Agency Decision and Where the AI-
leged Fraud as to Which Judicial Review Is Sought
Does Not Reach the Core of a Case nor the
Agency Decision, Review Should Be Denied in
the Interest of Finality of Decisions and Avoid-
ance of Trials De Novo in the District Courts.
The decision of the Court of Appeals involves an
important question regarding the scope of judicial re-
view of an agency ruling. The Court holds it was
error for the district court to deny, for lack of jurisdic-
tion, Doria’s Motion for Leave to Amend Its Complaint
to show alleged fraud (Opinion, Appen. “A”, p. 8).
The Court of Appeals’ rationale is that alleged newly
discovered evidence of fraud and perjury in an adminis-
trative proceeding will not be found in the record
and that the district court “may consider evidence extrin-
sic to the record in determining whether such allega-
tions are meritorious.” (Opinion, Appen. “A”, p. 5).
This conclusion is reached without considering whether
from the record as a whole, the alleged tainted evidence
really went to the core of the case or would have
made any difference in result. In this respect, Peti-
tioners submit that the holding will seriously undermine,
if not efface, the well settled rule that the proper
standard of judicial review of agency action is whether
the agency findings are supported by substantial evi-
dence in the record as a whole. 5 U.S.C. § 706(2)(E);
Universal Camera Corp. v. NLRB, 340 U.S. 474, 488-
491 (1951); Multiple Use Inc. v. Morton (9th Cir.
1974) 504 F.2d 448, 452.
|
The Court of Appeals concededly found no direct
authority for its holding, but cited the case of Standard
Oil Co. v. Montedison, SpA (3d Cir. 1976) 540 F.2d
611 as “instructive.” In Montedison, a patent interfer-
ence case in which the plaintiff sought judicial review
under 35 U.S.C. § 146 and raised for the first time
an issue of fraud in the interference proceeding, the
Third Circuit did hold that the district court “in appro-
priate circumstances . . . may, in such an action,
in the exercise of a sound discretion, permit an issue
of fraud which infected the Board’s determination to
be raised though it was not raised in the interference
proceeding. .. ~ Id at 617. However, the court further
stated in Montedison that a district court should not
permit the issue to be raised for the first time unless
“. . . Manifest injustice to the parties and the public
will otherwise result. . .” Jd at 617.
In the case at bench, Petitioners submit that on
the record below the Court of Appeals has improvident-
ly tipped the scales in favor of Doria in its concern
over “preventing the prejudice to Doria . . . which
arises out of circumstances such as those before us
[which in the opinion of the Court outweighed] any
countervailing interests which administrative agencies
and other parties which appear before them may have
in the finality of agency decisions. . . .” (Opinion,
Appen. “A”, p. 8). Citing by analogy the collateral
estoppel doctrine, the Court of Appeals further stated
that the advantages of finality can only be enjoyed
when the aggrieved party has had an adequate oppor-
tunity to litigate his claim.
Petitioners submit that as the administrative record
herein amply shows, Doria had precisely that oppor-
tunity in the presentation of its evidence in the mining
pe One
contest. See Summary of Testimony of Doria’s seven
witnesses at the hearing, Appen. “C”, pp. 29-33, [17
IBLA at 392-395]. The alleged fraud which was the
basis both of Doria’s Motion to Amend and subsequent
Motion for Relief Under Federal Rules of Civil Pro-
cedure 60(b)(3) was clearly intrinsic to the administra-
tive proceeding.” It involved solely the reliability of
results of tests run on samples taken from the claims
by Schroter’s crew. Those results, now considered so
crucial by Doria, were certainly not accepted at face
value by Doria as evidenced by the number of witnesses
who testified on Doria’s behalf, contrary to Schroter’s
opinions.
In another case cited by Court of Appeals below,
Interstate Investors, Inc. v. United States, 287 F.Supp.
374 (S.D.N.Y. 1968), a three judge court decided
the merits of a claim to set aside an agency decision
for alleged fraud. However, the Court was guided by
the following principle therein:
“Plainly the fact that false or misleading testi-
mony was given during the course of a judicial
proceeding does not constitute a fraud upon the
court unless it appears that the court was so
2The alleged “fraud”, if indeed it existed, could easily have
been uncovered or probed at the hearing had Doria’s counsel
desired to pursue on cross-examination the basis of contestants’
Exh. 14A which tabulated the test results of samples taken
from the claims. In a mining contest, as in any adversary
proceeding, a party does not accept adverse evidence because
of the supposed “integrity” of an assay or testing laboratory.
Nor does an adverse party allow unfounded conclusions by
another side’s experts. The factual bases of an adversary ex-
pert’s opinion must, of course, be probed and questioned.
If, years after the hearing in a collateral proceeding, it turns
out that the evidence was not as solid as it appeared at
the hearing, it is too late to rebut it. Under the rubric
of “Newly Discovered Evidence of Fraud,” this was precisely
Doria’s tactic in the district court.
re cee On ee Ee ie ee
| wan
misled by such testimony as to render a decision
based on a mistaken view of the material facts.
[Citations] This is of course equally true in an
administrative proceeding.”
287 F.Supp. at 382.
In the instant case, the testimony in the administrative
hearing as thoroughly reviewed in the IBLA decision,
clearly shows that neither the administrative law judge
nor the IBLA was so influenced by the results of
a single set of tests run on the Doria samples as to
render the decision nullifying the claims a miscarriage
of justice predicated on a mistaken view of material
facts. Regardless of results of tests on the claims, the
administrative law judge after reviewing all the evidence
stated in his decision,
“The use of material on the claims as of July
1955 for aggregate required a plant or some other
means of screening, washing and grading. Al-
though there was water [giving Doria the benefit
of the doubt on this point], it had not been
developed, there was no processing plant, and
the only potential market was the State of Califor-
nia. The State constructed roads across the claims
during the two periods but used material from
a different area. This falls far short of establishing
that there was a market for the sand and gravel
on any one of the claims or on the claims as
a group on the date that common varieties of
sand and gravel were excluded from location... .”
[CR 40].
Similarly, after its comprehensive review of testimony
and exhibits adduced by both sides, the IBLA con-
ven eee
cluded with respect to the sand and gravel deposits
as follows:
“The evidence presented at the hearing clearly
established that the sand and gravel on the subject
claims was of inferior quality and was not ac-
ceptable for the type of work being done in the
relevant market for the period 1955 to the hearing.
During that period deposits of superior quality
were actively exploited in the area and there was
only a limited local demand for sand and gravel.
Under such circumstances, no discovery of sand
and gravel existed on appellants’ claims. (Citation)
It is of no consequence that appellant Hutchinson
gave material from the claims to his friends at
no cost. It has been held that the disposal of
substantial quantities of sand and gravel at no
profit does not demonstrate the existence of a
market for the material which would induce a
man of ordinary prudence to expend his means
in an attempt to develop a mine on his claims.
(Citation )”.
(Appen. “C”, 17 IBLA at 396).
The fraud issue raised by respondent Doria below
was relevant only to the quality of materials on the
claims for use in building materials. However, as is
established by decisions involving sand and gravel loca-
tions, the quality of materials on the claims is but
one factor in establishing a discovery of valuable min-
eral deposits. See Clear Gravel Enterprises, Inc.
v. Keil (9th Cir. 1974) 505 F.2d 180. Other factors
which were addressed in depth by the IBLA decision,
and found wanting in the Doria claims, are: accessibili-
ty of the deposit, its proximity to the relevant markets,
the demand for the specific materials on the claims
and the locator’s bona fide efforts, or lack thereof,
a ee
to develop the claims and ability to compete profitably
in the market with a product extracted from the claims.
In this regard, the following language in the case
of Humboldt Placer Mining Co. v. Sec’y of the Dept. of
Interior (9th Cir. 1977) 549 F.2d 622, in which
the court quoted approvingly from an IBLA decision
affirming the invalidity of certain placer mining claims
located for sand and gravel is particularly applicable
herein:
“. . . Here there was no positive evidence of
marketability to overcome the government’s prima
facie case. Further the determination of the IBLA
that the government had made out a prima
facie case of lack of discovery was supported
by testimony disparaging the quality of the gravel
on the claims.” :
549 F.2d at 625-626.
In the case at bench there was ample testimony
from other witnesses, independent of the challenged
test results evidenced by Exh. 14A, that the quality
of the Doria deposits was inferior compared with that
of established aggregate producers in the San Bernar-
dino and Victorville market areas. See IBLA opinion
reviewing the testimony of Messrs. Thwing, Hove and
Curtin (Appen. “C”, pp. 27-29) [17 IBLA at 391-
392]. Indeed, Doria’s own expert, Mr. Longfield, char-
acterized the quality of the Doria material as marginal
at best and insufficient in and of itself to sustain
a mine (Record, Adm. Hrg. 1222, 1241). The fore-
going portions of the record independently supported
the IBLA decision. The opinion of the Court of Appeals
remanding the case to hear the alleged fraud issue
thus not only undermines the substantial evidence rule,
but is wasteful and unncessary in light of the record
presented herein.
ee ee
II.
Where the Alleged Tainted Evidence Does Not Go to
the Core of a Mining Contest and Where Other
Evidence in the Record Amply Supports the
Agency Decision, the Integrity of the Process Is
Not so Compromised as to Require a Hearing on
Charges of Fraud.
Understandably, the cases reaching this Court in
which the integrity of the record below has been chal-
lenged have been very limited in number. In such
cases this Court quite properly declined to review the
record and remanded the matter to the lower court
to determine where the truth lay. E.g., United States
v. Shotwell Manufacturing Co., 355 U.S. 233 (1957);
Communist Party of the United States v. Subversive
Activities Control Board, 351 U.S. 115 (1956). In
one exceptional case the long-standing, deliberately con-
trived fraud was so egregious as to call for the equitable
remedy of vacating the fruits of a judgment obtained
by the fraud long after its perpetration on the govern-
mental agency and the courts. Hazel-Altas Glass Co.
v. Hartford Empire Co., 322 U.S. 238 (1944).
In full awareness both of the seriousness of charges
of fraud and of this Court’s meticulous standards in
supervision of lower court proceedings to assure that
justice is fairly administered, Petitioners submit the
record herein does not fall within the category of
the cases above-cited. Rather, this is a case where
a single set of test results embodied in a single docu-
ment and introduced in the course of examination
of an adversary expert is challenged years later on
the pasis of alleged after-discovered irregularities. This
is not a case where the alleged tainted testimony was
so contrived, so egregious or so pervasive in the record
as to amount to a fraud on the adjudicatory agency.
peat. Was
Wholly apart from the test results evidenced by
Schroter’s Exhibit 14A, Petitioners established more
than a prima facie case that the Doria deposits were of
inferior quality. Witness Thwing, a consultant and for-
mer president of Triangle Rock products, concluded
after his study which included results of tests in addition
to those represented by Exhibit 14A, that the optimum
use of the Doria deposits would be for low-grade fill
material (Record, Adm. Hrg. 330, 345-46, 362, 380).
Mr. Curtin of Owl Rock Products was of the opinion,
even after taking samples and entering into a short-
lived option with Doria, that the claims could not
have supported a continuous commercial aggregate mine
because the quality of material was poor and the rele-
vant market adequately served by other producers
(Record, Adm. Hrg. 457-458). At Doria’s request Mr.
Hove, operator of a concrete batch plant, also took
samples from the claims and test results likewise indi-
cated the material was substandard for commercial
use (Record, Adm. Hrg. 482).
Further, as evidenced by the IBLA decision, Doria
itself, notwithstanding its array of witnesses, failed to
adduce convincing evidence to sustain its burden of
proof that material on the claims was marketable at
a profit either for sand and gravel or feldspathic sands.
As stated under Point I, supra, proof of discovery
of valuable minerals requires more than a showing
of quality of the deposit involved. As appears from
the IBLA decision, there was not a shred of evidence
of any commercial demand for the sand and gravel
deposits, or that material was removed from the claims
for use in high grade concrete aggregate. Accordingly,
as in Humboldt Placer Mining Co. v. Sec’y of the Dept.
of Interior, supra, 549 F.2d 622, 625, the IBLA con-
oe
cluded there was no positive evidence of marketability to
overcome the contestants’ prima facie case of invalidity
[17 IBLA 380, 396]. The lack of sales of material
from the Doria claims during the long years in which
they lay dormant was certainly relevant to the issue of
marketability. In the absence of a demand and market-
ability of the Doria deposits at a profit, the claims
were properly declared null and void regardless of
the results of tests run on samples. The importance
of showing marketability at a profit in respect to mining
claims was emphasized by this Court in the landmark
decision of United States v. Coleman, 390 U.S. 599,
602 (1968), which approved the marketability require-
ment as a complement to the traditional “prudent man”
test.
On the foregoing record, the Court of Appeals’ re-
versal of summary judgment in favor of Petitioners
and remand of the case to the district court was er-
roneous absent consideration of whether the alleged
tainted testimony affected the decisions below or would
have made any difference in result viewing the record
as a whole. Resting its decision on a narrow jurisdic-
tional ground, the Court of Appeals declined to consider
this aspect of the case. Such disposition as was made
herein, will encourage attacks on agency decisions in
derogation of the limited scope of judicial review and
will open the door to now proscribed de novo trials
by the simple expedient of alleging fraud. Even under
the narrow holding of the Court of Appeals, such
expedient will involve examination of matters extrinsic
to the record thereby giving the aggrieved party the
equivalent of a de novo trial ostensibly to determine
if the agency decision was “infected” with fraud. This
result is wasteful, unnecessary and unfair in a case,
jae
such as the one at bench, where ample evidence, inde-
pendent of the alleged tainted testimony, exists to sup-
port the agency decision under settled principles of
mining law.
Conclusion.
An aggrieved party’s attack on an agency decision
based on matters extrinsic to the administrative record,
but intrinsic to the hearing, such as alleged perjured
testimony, does not ipso facto require an inquiry into
the merits of the charges. The Court should determine
from a review of the entire record whether the alleged
tainted evidence went to the core of the agency decision.
If, as in the instant case, it did not and the decision
is otherwise well supported by substantial evidence,
continued litigation is needless and constitutes an un-
warranted burden on the courts.
For the reasons set forth above a writ of certiorari
should issue to review the judgment and opinion of
the Ninth Circuit.
Respectfully submitted,
RICHARD G. RYPINSKI,
Chief Counsel,
JOSEPH A. MONTOYA,
ROBERT W. ViDoR,
Attorneys for Petitioner
State of California.
REID, BABBAGE & COIL,
RICHARD A. BROWN,
Davip G. Moore,
Attorneys for Petitioner
Calnev Pipeline Company.
January 22, 1980.
niinesili
Appendix ‘‘A’’.
Opinion.
United States Court of Appeals, for the Ninth Circuit.
Doria Mining and Engineering Corporation, a corpora-
tion, Plaintiff-Appellant, vs. Rogers Morton, Secretary of
the Interior, Calnev Pipeline Company a corporation, the
State of California, Douglas Leisz, as Regional Director of
United States Forest Service, and Harold Mitchell, as Acting
Forest Supervisor of San Bernardino National Forest, De-
fendants-Appellees. No. 77-1163.
Appeal from the United States District Court For the
Central District of California.
Filed: Nov. 2, 1979.
Before: TRASK and WALLACE, Circuit Judges, and
SOLOMON,” District Judge.
WALLACE, Circuit Judge:
Doria Mining and Engineering Corporation (Doria) ap-
peals from a summary judgment in which the district court
affirmed an administrative decision by the Department of
the Interior Board of Land Appeals (IBLA) regarding the
validity of various placer mining claims. Among other
things, Doria alleged that the IBLA decision was obtained
by fraud and perjury, but the district court would not con-
sider this allegation because it was based on evidence not
found in the administrative record. We vacate the summary
judgment and remand to the district court.
I
Doria has asserted a possessory interest in 18 placer
claims (for the discovery of valuable sand and gravel de-
posits) which had been obtained from the United States
“Honorable Gus J. Solomon, United States Circuit Judge, District
of Oregon, sitting by designation.
aseatilss
Forest Service by Doria’s predecessors in interest. The For-
est Service granted to the State of California an easement
across portions of land covered by Doria’s purported claims,
on which California subsequently built part of Interstate
Highway 15. The Forest Service also granted special use
permits to Calnev Pipeline Company (Calnev), which en-
abled it to construct a pipeline across land covered by
Doria’s claims. Both the easement and the permits were
issued ‘‘subject to existing claims,’’ but neither California
nor Calnev sought permission from Doria before engaging
in their construction projects. In 1970 and 1971, Doria filed
actions against California and Calnev in California superior
court alleging trespass and inverse condemnation.
In 1972, California and Calnev initiated private contest
proceedings in the Department of the Interior pursuant to
43 C.F.R. § 4.450-1, claiming interests adverse to Doria’s
in the lands on which Doria’s purported placer claims were
located, and alleging that the claims were invalid for failure
to discover a valuable mineral deposit within their limits.
The United States subsequently intervened as a contestant
on behalf of the Forest Service. Following a hearing, an
administrative law judge ruled that the claims were invalid,
and, on appeal, the IBLA affirmed.
Doria requested reconsideration of the IBLA judgment,
based on ‘‘suspicions’’ that the contestants’ primary expert
witness, Schroter, had fraudulently altered mineral samples
from Doria’s claims, and had perjured himself in testifying
about his sampling and testing methods. Upon denial of the
request, Doria filed a complaint in district court pursuant
to 28 U.S.C. § 1331(a) and portions of the Administrative
Procedure Act, 5 U.S.C. §§ 701-06,' for judicial review of
‘Subsequent to Doria’s filing of its complaint, the Supreme Court
held that jurisdiction to review administrative decisions by the Secretary
of the Interior is conferred on the district court by section 1331, and
not by the Administrative Procedure Act. See Andrus v. Charlestone
Stone Prods. Co., 436 U.S. 604, 607 n.6 (1978).
ae. oe
the IBLA judgment. Based upon the Declaratory Judgment
Act, 28 U.S.C. §§ 2201-02, Doria also requested a judgment
declaring that its placer claims were legal and valid. The
complaint did not allege that Schroter had committed either
fraud or perjury before the IBLA.
Doria claims that thirteen months after commencing its
district court review action, it discovered in the collateral
state proceedings what it believed was strong evidence of
fraud and perjury by Schroter in the IBLA proceeding. Doria
asserts that it immediately moved the district court for leave
to amend its complaint to include allegations of such mis-
conduct. The district judge took the motion under submis-
sion.
One month later, Doria renewed its motion for leave to
amend and, in the alternative, moved for a stay of the district
court proceedings pending an attempt to obtain a rehearing
before the IBLA based on the purported new evidence. Both
motions were denied, and the district judge subsequently
granted summary judgment affirming the IBLA decision.
Doria then moved for, and the district judge summarily
denied, relief from judgment pursuant to Fed. R. Civ. P.
Rule 60(b)(3).
Doria raises three issues on appeal: (1) whether the district
court erred in denying, on jurisdictional grounds, -Doria’s
motion for leave to amend its complaint or, in the alter-
native, for a stay of proceedings; (2) whether Doria’s al-
legations of fraud and perjury raised factual issues that made
the district court’s subsequent granting of summary judg-
ment improper; and (3) whether the district judge’s summary
denial of Doria’s Rule 60(b)(3) motion constituted an abuse
of discretion. We find it necessary to consider only the first
issue.
sii.
I]
The district courts have jurisdiction to review adminis-
trative decisions of the Secretary of the Interior pursuant to
28 U.S.C. § 1331(a). Andrus v. Charlestone Stone Prods.
Co., 436 U.S. 604, 607 n.6 (1978). When the regulations
governing an administrative decision-making body require
that a party exhaust its administrative remedies prior to
seeking judicial review, the party must do so before the
administrative decision may be considered final and the
district court may properly assume jurisdiction. Eluska v.
Andrus, 587 F.2d 996, 999 (9th Cir. 1978); Montgomery
v. Rumsfeld, 572 F.2d 250, 252-53 (9th Cir. 1978); see 5
U.S.C. § 704.
Department of Interior regulations do require that ad-
ministrative remedies must be exhausted before any admin-
istrative decision from the Department is subject to judicial
review. 43 C.F.R. § 4.21(b). Administrative remedies are
deemed exhausted upon disposition of a claim which is not
appealable to either the Director of the Interior Office of
Hearings and Appeals or an Appeals Board such as the
IBLA. Id. § 4.21(b). A decision of the IBLA is not subject
to further appeal before either the Director or any Appeals
Board. Jd. § 4.21(c). When Doria lost before the IBLA,
therefore, it had exhausted its administrative remedies, and
the IBLA determination constituted the Secretary of the
Interior’s final decision to deny the validity of Doria’s pur-
ported placer mining claims. The district court thus had
jurisdiction to review the IBLA judgment.
Ill
The district court, however, denied Doria’s motion for
leave to amend, apparently on the ground that the court was
without jurisdiction to consider evidence not found in the
a a
administrative record.’ It is true that the appropriate standard
for review of administrative proceedings is whether the ad-
ministrative findings are supported by substantial evidence
in the record as a whole. See, e.g., Universal Camera Corp.
v. NLRB, 340 U.S. 474, 490-91, 493, 497 (1951); 5 U.S.C.
§ 706. When, however, the party seeking review alleges
that it has discovered new evidence showing that the de-
cision before the court for review was obtained by a fraud
on the administrative proceeding, we hold that the reviewing
court may consider evidence extrinsic to the record in de-
termining whether such allegations are meritorious.
Although no case was cited to us, and we have found no
case which is direct authority for our conclusion, Standard
Oil Co. v. Montedison, S.P.A., 540 F.2d 611 (3d Cir.
1976), is instructive. In that case, the plaintiffs had filed,
pursuant to 35 U.S.C. § 146, for district court review of
a decision by the Board of Patent Interferences (Board).
They later sought leave from the district court to amend
their complaint to include allegations of fraud in the pro-
ceedings before the Board. Believing that it was not em-
powered to consider an issue that had not been raised before
The exact language of the districi judge, in colloquy with counsel,
was as follows:
THE COURT: No, I think that I will take your matter to amend
under submission . . ., but I just don’t think I have jurisdiction.
You are attacking the matter collaterally. You can’t do it.
THE COURT: If somebody has perjured himself, why don’t
you refer it to the United States Attorney?
THE COURT: To the criminal section.
THE COURT: I will take it under submission but | just don’t
think I have any more right to interfere with — in this kind of
a basis than I would have the right to interfere in a State Court
trial proceeding.
The district judge ultimately denied Doria’s motion without comment,
and without giving Doria an opportunity to develop the motion’s evi-
dentiary foundation.
‘salted
the Board, the district court denied the plaintiffs’ motion
to amend. /d. at 618. On appeal, the Third Circuit held that
‘‘in appropriate circumstances the district court may, in [a
section 146] action, in the exercise of a sound discretion,
permit an issue of fraud which infected the Board’s deter-
mination to be raised though it was not raised in the inter-
ference proceeding.’’ Jd. at 617. The court enumerated a
number of factors which the district court should consider
when deciding whether to exercise discretion to hear new
allegations of fraud,* and then stated: ‘‘If after considering
all relevant factors the court concludes that manifest injus-
tice to the parties and the public will otherwise result, it
should permit the issue to be raised for the first time in the
§ 146 proceeding.’’ Jd. 3
Montedison’s holding that a court reviewing an admin-
istrative determination may properly exercise its discretion
to hear an issue of fraud not presented before the admin-
istrative body, and hence not found in the administrative
record, finds some support in earlier cases. See Interstate
Investors, Inc. v. United States, 287 F. Supp. 374, 382-84
(S.D.N.Y. 1968) (three-judge court) (court reached the
merits of complaint seeking to set aside an adminstrative
decision for fraud, based on evidence not contained in the
administrative record), aff d, 393 U.S. 479 (1969) (per cur-
iam); cf. United States v. Shotwell Mfg. Co., 355 U.S. 233,
240-45 (1957) (allegation that new evidence had been dis-
covered showing fraud had been committed on the district
court; Supreme Court considered such evidence in deciding
that vacation and remand were required). See also Linn and
‘These factors include: (1) whether there was ‘‘suppression, bad faith,
or gross negligence on the part of the plaintiff in failing to raise the
issue of fraud before the Board’’; (2) whether evidence of the alleged
fraud was ‘‘reasonably available’’ at the time the dispute was before
the Board; and (3) whether the issue ‘thas been or may be more con-
veniently and expeditiously raised in another’ forum. 540 F.2d at 617.
Pan. a
Lane Timber Co. v. United States, 236 U.S. 574, 578-79
(1915) (a decision by the Secretary of Interior to issue land
patents is open to reconsideration by the courts when the
issuance has been obtained by fraud.*
Although the circumstances of Montedison are not iden-
tical to those of this case,” the rationale of that case—that
in certain circumstances a court reviewing an administrative
decision should hear new allegations of fraud based on evi-
dence extrinsic to the record in order to prevent injustice—
is equally applicable here. Newly discovered evidence of
fraud and perjury in an administrative proceeding will not
be found in the administrative record. If the reviewing court,
in the face of an allegation that such evidence exists and
that administrative remedies have been exhausted, never-
theless confines itself to consideration only of evidence in
the record, the party seeking review is left without any
forum in which to argue the allegedly fraudulent basis of
the administrative judgment. This is precisely what hap-
“But see Iron Ore Co. of Canada v. Dow Chem. Co., 177 U.S.P.Q.
34, 43-44 (D. Utah 1972) (district court indicated that, generally, it
need not consider a newly raised issue in a section 146 proceeding),
aff d on other grounds, 500 F.2d 189 (10th Cir. 1974). See also Stand-
ard Oil Co. v. Montedison S.p.A., 540 F.2d 611, 616 n.10 (3d Cir.
1976), (finding Jron Ore Co. unpersuasive authority on -question
whether new issue of fraud may be raised before reviewing court).
*An action taken in district court pursuant to 35 U.S.C. § 146 is
procedurally a trial de novo, whereas judicial review of an IBLA judg-
ment is not. The court in Montedison, however, observed that a section
146 review proceeding ‘‘is ordinarily subject to the general rule of
estoppel applicable to proceedings for the review of administrative
agency actions that consideration of issues ancillary to priority is limited
to those issues which have been raised before the Board in the inter-
ference proceeding.”’ Standard Oil Co. v. Montedison S.p.A., supra,
540 F.2d at 616 (footnote omitted). Insofar as allegations of fraud
extrinsic to the administrative record are concerned, then, district court
review of administrative proceedings, pursuant to section 146, is, as
viewed by Montedison, indistinguishable from judicial review of IBLA
proceedings.
conics
pened to Doria.° We conclude that the importance of pre-
venting the prejudice to Doria and similarly situated parties
which arises out of circumstances such as those before us
outweighs any countervailing interests which administrative
agencies and other parties which appear before them may
have in the finality of agency decisions. Cf. Nasem v.
Brown, 595 F.2d 801, 806-07 (D.C. Cir. 1979) (consid-
eration of applicability of collateral estoppel doctrine; court
states that doctrine represents balance of needs of judicial
finality and efficiency as against need for fairness and ac-
curacy, and concludes that ‘‘[t]he advantages of finality
. . can only be fairly garnered when the party to be es-
topped has had an adequate opportunity to litigate his
claims’’ id. at 806).
We thus hold that it was error for the district court to
deny, for lack of jurisdiction, Doria’s motion for leave to
amend its complaint. Because we do not know how the
district judge would have ruled on the motion had he be-
lieved he had jurisdiction, we vacate the summary judgment
*During oral argument, the government contended that the proper
forum for consideration of Doria’s new evidence of alleged fraud and
perjury was the Department of the Interior. The record, however, sug-
gests that, as a matter of policy, the Department of the Interior refuses
to grant requests for reconsideration of an administrative determination
when the decision is before the district court for review. This was the
Department’s reason for denying Doria’s first request for reconsider-
ation, and the government itself stated during oral argument that it was
also the basis for denying Doria’s second request for reconsideration,
made while this appeal was pending. In view of this apparent policy,
it is at best questionable whether the proper forum for Doria to present
its allegations of fraud rests in the Department of the Interior. In any
case, this would not appear to implicate the jurisdiction of a reviewing
district court to consider such evidence, because the Department does
not require that a party’s exhaustion of its administrative remedies prior
to seeking judicial review include a request for reconsideration of the
administrative decision. 43 C.F.R. § 4.21(c).
puesta Nb iiesdlebes ee
~—
affirming the IBLA decision.’ We remand to the district
court for further proceedings consistent with this opinion,
including consideration of the merits of Doria’s motion.*
VACATED AND REMANDED.
It is thus unnecessary to decide whether the district court erred in
granting summary judgment in the face of Doria’s allegations of fraud
and perjury.
“Because, in arguing the merits of its motion, Doria will have an
opportunity to present to the district court its new evidence of alleged
fraud and perjury, we also find it unnecessary to consider Doria’s
suggestion that the district court erred when it refused to consider the
new evidence in connection with Doria’s Rule 60(b)(3) motion.
ania
APPENDIX ‘‘B’’.
Memorandum of Decision Granting Defendants’ Motion
for Summary Judgment.
United States District Court, Central District of Califor-
nia.
Doria Mining and Engineering Corporation, a Corpora-
tion, Plaintiff, v. Rogers Morton, Secretary of the Interior,
Calnev Pipeline Company, etc., et al., Defendants. No. CV
75-899-FW.
Filed: Sept. 28, 1976.
In this action Plaintiff appeals from the decisic - of the
Interior Board of Land Appeals (hereinafter the Board) de-
claring Plaintiff's placer mine claims invalid. Jurisdiction
is based upon 5 U.S.C. §§701-706.
Plaintiff asserts a possessory interest in eighteen unpa-
tented placer mining claims located within the San Bernar-
dino National Forest.
On or about September 26, 1968, the United States Forest
Service duly issued a highway easement to the State of
California, and pursuant thereto, the State of California,
without obtaining permission from the Plaintiff, constructed
a portion of State Highway 15 across a portion of said
claims.
In January, 1961, and March, 1970, the United States
Forest Service duly issued Special Use Permits to Calnev
Pipeline Company (hereinafter Calnev) and pursuant thereto,
Calnev constructed pipelines across portions of the afore-
mentioned mining claims without obtaining permission from
Plaintiff.
The easement to the State and the Special Use Permits
issued to Calnev were issued by the United States Forest
Service subject to all existing valid claims on said United
States Forest lands.
|
On or about December 30, 1970, Plaintiff filed suit in
the Superior Court of San Bernardino County, California,
Action No. 152480, against Calnev for trespass and inverse
condemnation of said unpatented claims. On January 5,
1971, Plaintiff filed a second suit in Superior Court for San
Bernardino County, California, Action No. 152504, against
The People of the State of California for trespass and inverse
condemnation because of the highway construction over and
across a portion of said claims.
Thereafter in July, 1972, Calnev and the State of Cali-
fornia initiated private contest No. R-4873 under 43 C.F.R.
4-450-1 et seq., in the United States Department of the
Interior claiming an interest adverse to Plaintiff in said lands.
The Contest Complaint charged that the eighteen purported
placer mining claims of Plaintiff were invalid for lack of
discovery of a valuable mineral deposit within the limits of
any of the claims. In January, 1973, the United States of
America intervened in behalf of the United States Forest
Service. Following a hearing in the United States Depart-
ment of the Interior, Office of Hearings & Appeals, Hear-
ings Division, the Administrative Law Judge declared each
and all of said claims null and void. The contestees took
a timely appeal to the Interior Board of Land Appeals which
declared all eighteen claims null and void. Plaintiff-is now
appealing the decision of the Interior Board of Land Ap-
peals.
An appeal from a decision of the Interior Board of Land
Appeals does not entitle the Plaintiff to a trial de novo on
the facts, but rather only to a determination that the Board’s
decision is supported by substantial evidence considering
the record as a whole. Multiple Use, Inc. v. Morton, 504
F.2d 448 (9th Cir. 1974).
In examining the record before the Court, the evidence
shows that the tests conducted by the government’s expert,
ne. ee
Mr. Austin Schroter, demonstrated the invalidity of the
claims under either the marketability or the ‘‘prudent-man’”’
man test. United States v. Coleman, 390 U.S. 599 (1968).
The tests showed there were no valuable mineral deposits
in the area of Plaintiff’s claims and that the sand and gravel
present in the area did not satisfy specifications required for
commercial aggregate, or common variety minerals, as of
July 23, 1955, the date of the Surface Use Act which with-
drew common variety minerals from location under the
mining laws. 30 U.S.C. §611. Plaintiff is therefore limited
to discoveries of noncommon or valuable minerals.
It appears that once the highway easement grant and Spe-
cial Use Permits were made, they had the effect of with-
drawing the areas covered thereby from mineral entries to
the extent necessary for the Interstate highway and the pipe-
line, and precluded mineral entries incompatible therewith.
See 1 American Law of Mining §2.85.
A mining claimant on withdrawn land must show dis-
covery of a valuable mineral deposit before the withdrawal,
since the right to prospect for minerals ceases on the date
of withdrawal. United States v. Pulliam, 1 IBLA 143 (1970);
see Lockhart v. Johnson, 181 U.S. 516, 520 (1901).
The mining claims involved herein remained open to sub-
sequent valuable mineral location subject however to the
grants of right of way and the Special Use Permits to the
State of California and Calnev.
With regard to Plaintiff’s discovery of noncommon va-
riety minerals, it appears from the testimony of Plaintiff's
own witnesses that its examination and testing of materials
for feldspathic sand (which the Board assumed to be non-
common variety) was preliminary and exploratory suggest-
ing prospecting and not development which is required to
meet the ‘‘prudent-man’’ test. Barton v. Morton, 498 F.2d
288 (9th Cir. 1974).
a
A valid claim requires more of an evidentiary showing
than finding that further exploration might be warranted.
Multiple Use, Inc. v. Morton, supra.
‘‘If mining claimants have held claims for several years
and have attempted little or no development or operations,
a presumption is raised that the claimants have failed to
discover valuable mineral deposits or that the market value
of discovered minerals was not sufficient to justify the costs
of extraction.’’ United States v. Zeweifel, 508 F.2d 1150,
1156 (10th Cir. 1975).
Plaintiff also alleges procedural errors which it claims
resulted in a denial of due process. The alleged errors in-
volve the government’s intervention in the proceeding ini-
tiated by the State of California and Calnev.
Plaintiff contends that 43 C.F.R. §4.451-1 only permits
the United States to initiate proceedings, not to intervene
in pending proceedings. While there is no case on point
regarding intervention of the United States, intervention by
the Bureau of Land Management seems clearly contem-
plated. It is provided in 43 C.F.R. §4.452-5 that ‘‘the con-
testant will then present his case following which the other
parties (and in private contests the Bureau, if it intervenes)
will present their cases.’’ It appears by analogy that the
United States should have the authority to intervene herein.
Plaintiff also alleges that the notice it received was in-
sufficient under 43 C.F.R. §4.451-1. However, the Court
finds the notice was sufficient to apprise Plaintiff that the
United States was adopting the private contestants’ claims.
Plaintiff asserts that the intervention of the United States
shifted the burden of proof to the Plaintiff, and that this was
improper. It should be noted, however, that in the decision
of Administrative Law Judge Holt there is no ruling on the
burden of proof. Moreover, the Board in its review of Judge
Holt’s decision stated that ‘‘regardless of which party the
a on
Judge placed the burden of proof upon, the evidence pre-
sented by the private contestants clearly established the in-
validity of the subject mining claims.’’ 17 IBLA 389.
Plaintiff’s last claim of procedural error, that it should
have been notified prior to the hearing that the burden of
proof had shifted, also appears to be without merit in view
of the number of witnesses it introduced. Plaintiff seemed
fully prepared to assume the burden of proof.
Based on the foregoing, the Court finds that Plaintiff had
a full hearing and an ample opportunity to present evidence,
and that there was no denial of due process. Furthermore,
it appears that the decision of the Board was supported by
substantial evidence.
The foregoing constitutes the summary of undisputed
material facts and conclusions of law of the Court. No
judgment shall be entered until the Court has signed its
formal judgment.
DATED this 28 day of September, 1976.
/s/ Francis C. Whelan
FRANCIS C. WHELAN
UNITED STATES DISTRICT JUDGE.
a Oe
APPENDIX ‘‘C’’.
United States Department of the Interior, Office of Hear-
ings and Appeals, Interior Board of Land Appeals, 4015
Wilson Boulevard, Arlington, Virginia 22203.
State of California, et al. v. Doria Mining and Engi-
neering Corporation, et al., United States, Intervenor. IBLA
74-192.
Decided: October 31, 1974.
Appeal from decision of Administrative Law Judge Gray-
don E. Holt (California Contest No. R-4873) declaring
mining claims null and void.
Affirmed.
APPEARANCES: Joseph A. Montoya, Esq., Robert L.
Meyer, Esq., Hugh R. Williams, Esq., and Robert W.
Vidor, Esq., Legal Division, Department of Public Works,
Los Angeles,’ for appellee State of California; David G.
Moore, Esq., Reid, Babbage & Coil, Riverside, California,
for appellee Calnev Pipe Line Company; Milnor E. Gleaves,
Esq., Los Angeles, California, for the appellants; Charles
F. Lawrence, Esq., Office of the General Counsel, De-
partment of Agriculture, San Francisco, California, for the
United States, Intervenor.
OPINION BY ADMINISTRATIVE JUDGE RITVO
Doria Mining and Engineering Corporation, Richard H.
Hutchinson, J. J. Schwietert and E. May Schwietert have
appealed from a decision by Administrative Law Judge
Graydon E. Holt, dated December 26, 1973, declaring ap-
'On June 25, 1973, the ies were given notice that pursuant to
CAL. GOV’T CODE §14008, the Department of Transportation suc-
ceeded to all the duties, powers, purposes, responsibilities and juris-
diction of the Department of Public Works, State of California, effective
July 1, 1973, and effective that date assumed the position of said
Department of Public Works as contestant in these proceedings. Counsel
of record remained the same.
a
pellants’ eighteen 40-acre association placer mining claims
null and void.
Appellants’ mining claims were located between March
1, 1953, and July 22, 1955.” The claims are situated in
Cajon Pass approximately halfway between Victorville and
San Bernardino, and lie within the San Bernardino National
Forest in secs. 14 and 23, T. 3 N., R. 6 W., S.B.M.,
California.
Appellee State of California claims an interest in sections
14 and 23 by virtue of a Highway Easement Deed issued
by the United States on September 26, 1968.° Between 1968
and 1970, the State entered upon portions of sections 14
and 23 and constructed a highway commonly known as
Interstate 15. This highway crosses over some of appellants’
mining claims. The State’s easement is subject to:
(1) Outstanding valid claims, if any, existing on the
date of this grant, and the Grantee shall obtain such
permission as may be necessary on account of any such
claims. [Ex. 1]
Appellee Calnev Pipe Line Company is a corporation
engaged in the construction, maintenance and operation of
pipeline systems for the purpose of transporting liquids. On
January 1, 1961, and March 27, 1970, the United States
Department of Agriculture, Forest Service, issued Special
Use Permits to Calnev for the construction of pipelines
across portions of sections 14 and 23. In 1961, Calnev
entered upon these sections and constructed a high pressure
pipeline. In 1970, Calnev again entered the area and con-
structed another high pressure pipeline. The pipelines cross
*See Appendix A.
*The right-of-way was granted by the Department of Transportation
under the authority of the Federal Aid Highway Act of August 27,
1958, as amended, 23 U.S.C. §107(d) (1970). The Department of
Agriculture, acting by and through the Forest Service, agreed to the
transfer of the easement through the San Bernardino National Forest.
_ | ae
over portions of appellants’ mining claims. Calnev’s permits
were ‘‘subject to all valid claims’’ (Exs. 2a, 2b).
On December 30, 1970, and January 5, 1971, appellants
filed in the Superior Court of San Bernardino County com-
plaints in inverse condemnation and trespass against Calnev
and the State of California. In their complaints appellants
alleged: (a) ownership of the 18 unpatented placer mining
claims; (b) that Calnev and the State, in construction of the
above-mentioned improvements, entered upon and took
permanent possession of portions of land covered by the
mining claims without permission and authority of appel-
lants; (c) that the lands embraced within said mining claims
contain valuable deposits of sand, gravel and precious met-
als; (d) that by reason of the construction and maintenance
of the improvements, extraction of sand, gravel and precious
metals within the area of the Easement Deed and Special
Use Permits has been rendered impossible; and (e) extraction
of minerals has been rendered practically and economically
unfeasible upon remaining portions of the mining claims.
Appellants prayed for damages against Calnev and the State
in excess of $15,000,000.
On July 20, 1972, appellees initiated a private contest
against appellants pursuant to 43 CFR 4.450. Appellees
claimed that by virtue of the easement and permits noted
above they were competing users, and claimed an interest
adverse to appellants’ interests in the lands embraced within
the mining claims. Their complaint maintained that appel-
lants’ mining claims were invalid for the following reasons:
(a) There is not disclosed within the boundaries of
Said mining claims, and each of them, mineral mate-
rials of a variety subject to the mining laws sufficient
in quantity, quality and value to constitute a discovery;
(b) The materials found within said mining claims,
and each of them, could not have been mined, removed
= =
and marketed at a profit prior to the Act of July 23,
1955; and
(c) The land embraced within said mining claims,
and each of them, is non-mineral in character.
Appellants filed an answer to the complaint stating that
the 18 placer mining claims were valid. Appellants also
filed a motion to dismiss the contest alleging that the con-
testants lacked standing to bring the action under the private
contest provision cited above because neither the easement
nor the permits created an interest ‘‘adverse’’ to the interests
of the contestees. Judge Holt denied appellants’ motion to
dismiss.
On January 15, 1973, Charles F. Lawrence, Esq., Office
of the General Counsel, United States Department of Ag-
riculture, filed a notice of appearance on behalf of the United
States requesting the right to intervene in the capacity of
a contestant. The request was based on the Forest Service’s
determination that the proceedings directly concerned the
status of land comprising a portion of the San Bernardino
National Forest. Judge Holt granted the motion for inter-
vention. Appellants’ motion to set aside the order allowing
intervention by the United States was denied. Thereafter,
a hearing was held in Los Angeles, California, beginning
on April 26, 1973.
The issues at the hearing narrowed to the questions of
(a) whether there was a discovery of a valuable sand and
gravel deposit on each claim as of July 23, 1955, and without
substantial interruption up to the time of the hearing, and
(b) whether there was a discovery of a valuable deposit of
feldspathic sand usable for glass manufacturing as of the
— =
time of the hearing.* Based on the evidence presented at the
hearing, the Administrative Law Judge found that such dis-
coveries did not exist and concluded that all 18 placer mining
claims were therefore invalid. Accordingly, he declared
them null and void.
On appeal, appellants press the following arguments:
1) The contestants have no property interest adverse to
the contestees’, which adverse interest is a prerequisite to
standing to initiate a private contest; the contestants only
have a license from the United States to cross national forest
land, subject to existing rights. Also, by way of preface,
appellants reassert their objection to the entry by the United
States as intervenor in these proceedings.
2) The rights of the contestees in each claim are private
property rights of which they may not constitutionally be
deprived by other private parties in an administrative pro-
ceeding.
3) The Administrative Law Judge erroneously assumed
that the contestees in a private contest have the burden of
proving the validity of their claims.
4) The contestants failed to establish by a preponderance
of the evidence that the claims are invalid.
5) The Administrative Law Judge improperly denied the
contestees’ motion to reopen the hearing for the receipt of
further evidence.
“The Judge did not make any determination regarding the charge that
the land was nonmineral in character. In his decision, at 2, he had the
following to say:
If there has been a discovery of a valuable mineral deposit, the
land must necessarily be mineral in character. If there has not
been such a discovery on a claim, the claim is void. Although
each 10-acre subdivision must be mineral in character, the de-
termination in this case will be based on the question of discovery
not on the mineral character of the land. Accordingly, the third
charge is dismissed.
= a
In their initial argument on appeal, appellants maintain
that the contestants’ easement and special use permits are
not interests ‘‘adverse’’ to the interests of appellants within
the meaning of 43 CFR 4.450-1. Accordingly, they argue
that the contestants lack standing to initiate a private contest.
We do not agree. 43 CFR 4.450-1 reads as follows:
By whom private contest may be initiated. Any per-
son who claims title to or an interest in land adverse
to any other person claiming title to or an interest in
such land or who seeks to acquire a preference right
pursuant to the act of May 14, 1880, as amended (43
U.S.C. 185), or the act of March 3, 1891 (43 U.S.C.
329), may initiate proceedings to have the claim of title
or interest adverse to his claim invalidated for any
reason not shown by the records of the Bureau of Land
Management. Such a proceeding will constitute a pri-
vate contest and will be governed by the regulations
herein.
In Duguid v. Best, 291 F.2d 235 (9th Cir. 1961), cert.
denied, 372 U.S. 906 (1963), the Court of Appeals held
that pursuant to the above regulation® the holder of a special
use permit granted by the Forest Service, Department of
Agriculture, which permitted construction of a dam and
spillway on national forest land, could initiate a private
contest to determine the validity of a mining claim in conflict
with the special use permit.®° The facts in that case are
‘With minor variation, the regulation was at that time codified at 43
CFR 221.51.
*See also Thomas v. DeVilbiss, 10 IBLA 56, 57 (1973), holding that
the owner of a grazing lease under section 15 of the Taylor Grazing
Act of 1934, as amended, 43 U.S.C. § 315 (1970), had a sufficient
adverse interest under 43 CFR 4.450-1 to initiate a contest against a
mining claimant alleging lack of discovery of valuable minerals; and
Sedgwick v. Callahan, 9 iBLA 216, 223 (1973), holding that surface
patentees under the Stock-Raising Homestead Act of 1916, as amended,
43 U.S.C. § 291 et seq. (1970), had an adverse interest sufficient to
bring a private contest against mining claimants. See also United States
v. Howard, 15 IBLA 139 (1974); City of Phoenix v. Reeves, 14 IBLA
315, 81 1.D. 65 (1974).
Pe at
er ae
strikingly similar to the situation presented in this proceed-
ing. In Duguid, the Paradise Irrigation District was granted
a permit ‘‘subject to all valid claims.’’ Subsequent to the
grant of the permit, the District, without the consent of the
mining claimants, took posession of a portion of the mining
claim and proceeded to construct a dam and spillway
thereon. The claimants then instituted an action against the
District in the Superior Court of the State of California
alleging unlawful taking of private property. Thereafter the
District filed in the California Land Office, Bureau of Land
Management, a complaint against the mining claimants as
a private contest seeking an adjudication by the Bureau of
the validity of the mining claim. The District’s complaint
alleged that its special use permit entitled it to use the lands
specified in its permit, that the mining claimants were as-
serting an adverse claim, and that the lands within the min-
ing claim were nonmineral in character and contained min-
erals insufficient to constitute a discovery. The Court of
Appeals held that under such circumstances the initiation
of a private contest by the District was proper.
[1] A similar conflict of interest exists in the present
proceeding. To the extent that a multi-lane, major freeway
and high-pressure pipelines cannot co-exist with the mining
of sand and gravel and other minerals on the subject-claims,
the interests of the State and Calnev are clearly ‘‘adverse’’
to the interests of the appellants within the meaning of 43
CFR 4.450-1.’ Appellees are entitled to bring an action in
The record indicates that in 1960 appellant J. J. Schwietert, then
owner of all 18 claims, executed a waiver of rights to surface use thereof
(Exs. C, D, E) under the provisions of section 6 of the Surface Resources
Act of July 23, 1955, 30 U.S.C. § 614 (1970). By such voluntary
relinquishment, Mr. Schwietert gave the United States the right to
manage and dispose of the vegetative surface resources on the claims
and to manage other surface resources thereof. But as correctly pointed
out by appellants, section 4 of the Act, 30 U.S.C. § 612 (1970),
provides that,
(footnote continued on following page)
a
the Department to determine whether discoveries have been
perfected on appellants’ unpatented mining claims so that
appellees may know the proper course to follow in protecting
their interests in the land. Accordingly, we conclude that
the appellees have standing to bring this private contest.
{2] Appellants further object to the United States De-
partment of Agriculture intervening in the contest in the
capacity of a contestant. Intervention was clearly proper as
the Department of Agriculture was a party whose interests
were affected by the proceeding. See United States v.
McCall, 2 IBLA 64, 75, 78 I.D. 71 (1971). When lands
within national forests are not valuable for their mineral
deposits, the Forest Service is entitled to the free and un-
restricted possession and control of the lands in order to
properly administer them as the law directs. Accordingly,
if the Department of Agriculture determines that it has an
administrative need to ascertain its right to certain lands
upon which mining claims are located, then it is entitled to
have that right adjudicated, and that duty devolves upon
this Department. United States v. Bergdal, 74 1.D. 245,
252 (1967); H. H. Yard, 38 L.D. 59, 66-67 (1909). The
purpose of this private contest was to ascertain the validisty
of mining claims lying in a national forest. The initiation
of such a proceeding could have been recommended by the
Forest Service pursuant to the Memorandum of Understand-
ing executed by the Bureau of Land Management and the
any use of the surface of any such mining claim by the United
States, its permittees or licensees, shall be such as not to endanger
or materially interfere with prospecting, mining or processing
operations or uses reasonably incident thereto * * *.
Section 6 further provides that,
no such waiver or relinquishment shall be deemed in any manner
to constitute any concession as to the date of priority of rights
under said mining claim or as to the validity thereof.
Thus, the relinquishment of surface use under this Act has not removed
the conflict between the parties.
atl
Forest Service, effective May 3, 1957. VI BLM Manual
3.1 (June 21, 1962). Had such a separate proceeding been
brought, it could have been consolidated with the private
contest. Marvel Mining Co. v. Sinclair Oil and Gas Co.,
United States v. Marvel Mining Co., 75 1.D. 407, 410
(1968). Whether done by consolidated proceedings or by
intervention, the substance of the action is the same. Fur-
thermore, the Government intervenor may attack the validity
of the mining claims on the grounds disclosed by the private
contestants’ complaint. Jebson v. Spencer, 61 1.D. 157, 169
(1953). It was also proper for the Government to be rep-
resented by counsel employed by the Department of Agri-
culture acting on behalf of the Forest Service. United States
v. Ramsher Mining and Engineering Co., 14 IBLA 32, 36
(1973). See also 43 CFR 1862.4.
[3] Appellants’ second allegation of error is also without
merit. If an unpatented mining claim is invalid, compen-
sation is not required because ‘‘no right arises from an
invalid claim of any kind,’’ and thus nothing is taken from
the claimant. Cameron v. United States, 252 U.S. 450, 459-
60 (1920). This is true whether the determination of inva-
lidity is made in a proceeding initiated by the Government
or by a private party. In either case the adjudication is made
not by the party who initiates the proceedings, but by au-
thorized representatives of the Department of the Interior.
See Duguid v. Best, supra at 241. It has been argued before
that such validity proceedings are unconstitutional admin-
istrative takings or condemnations of private property. The
courts, however, have recognized that the Department of
the Interior has plenary power in the administration of public
lands, and as part of that power the Department has the
authority, after proper notice and upon adequate hearing,
to determine the validity of unpatented mining claims. Best
v. Humboldt Placer Mining Co., 371 U.S. 334 (1963);
a, Y a
Cameron v. United States, supra; Converse v. Udall, 399
F.2d 616 (9th Cir. 1968), cert. denied, 393 U.S. 1025
(1969); Davis v. Nelson, 329 F.2d 840 (9th Cir. 1964). See
also United States v. Howard, 15 IBLA 139, 143 (1974);
United States v. Northwest Mine & Milling, Inc., 11 IBLA
271, 272-73 (1973); United States v. Dummar, 9 IBLA 308,
309 (1973).
In their third and fourth arguments, appellants generally
maintain that the Administrative Law Judge’s decision was
incorrect as it was based on the improper assumption that
the contestees had the burden of proving the validity of their
claims. Appellants argue that the contestants were required
and failed to prove by a preponderance of the evidence that
the claims were invalid.
We note that while in a private contest the party bringing
the action generally has the burden of preponderating on the
disputed issue, Marvel Mining Co. v. Sinclair Oil and Gas
Co., supra at 423, when the Government intervenes as a
contestant the proceeding then becomes analogous to any
other government contest where we have held that the con-
testant need only show a prima facie case of invalidity. The
burden then shifts to the mining claimant to show by a
preponderance of the evidence that the claims are valid.
United States v. Clear Gravel Enterprises, Inc., 2 IBLA
285, 301 (1971); see Foster v. Seaton, 271 F.3d 836, 838
(D.C. Cir. 1959).
In any case, the issue is without consequence because
regardless of which party the Judge placed the burden of
proof upon, the evidence presented by the private contes-
tants clearly established the invalidity of the subject mining
claims. The thrust of contestants’ evidence wholly negated
the existence of a discovery on any of the claims. Thus, we
find that the Judge’s conclusion that the claims are invalid
is supported by a preponderance of the evidence in the
ons, eel
record. As the appellants essentially contend that the Judge’s
decision is contrary to the evidence, we shall set forth the
salient points adduced at the hearing.
The contestants’ first witness was Austin Schroter, a con-
sulting geologist and mining engineer with 35 years of ex-
perience in various positions in the mining industry (Tr.
76). Mr. Schroter made a mineral evaluation study of the
claims to see if there were valuable minerals of any kind.
During his examination he was aided by Dr. Robin Willis,
an engineering and petroleum geologist, T. A. DeVore, a
metallurgical engineer, Charles A. Lee, a geologist, John
F. Schroter, an engineering technician, and Frank Nevin,
an engineering geologist (Tr. 98).
In the spring of 1972, Schroter and his aides undertook
a sampling program on each of the claims (Tr. . 124-25).
Samples were taken from each claim at an average depth.
of 10 to 12 feet. Each sample was then coned, quartered
down and split into four sections. One quarter was screened
and weighed on the ground to determine the sand to gravel
ratio, a second quarter was submitted for laboratory anal-
ysis, the third quarter was retained for examination for pre-
cious metal content, and the last quarter was reserved for
examination by interested parties, such as the contestees
(Tr. 127). ;
In a laboratory analysis, Schroter tested the samples from
the claims to determine their sand to gravel ratios, their
resistance to abrasion (L. A. Rattler Test), and their sand
and silt content (Sand Equivalent Test) (Tr. 135-36). The
test results indicated that the material on the claims did not
meet minimum ‘specifications required for commercial ag-
gregate in the industry as of July 23, 1955, or for any period
thereafter (Tr. 135, 142, 147, Ex. 14a).
In addition to the sand and gravel study, the claims were
examined for precious metals. Samples from each of the
en.
claims were panned to a concentrate and no gold or silver
was observed in particulate form (Tr. 147-48). The samples
were also subjected to fire assay (Exs. 15a, 15b, 15c) and
again the quantity of gold and silver did not approach com-
mercial significance on any of the claims (Tr. 153, 264).
Assays for precious metals were performed both by Mr.
DeVore and by the Union Assay Office of Salt Lake City,
Utah (Tr. 151, Exs. 14b, 14c, 14d). No metals of any value
were found. Schroter testified that the claims were examined
for any type of commercial mineral whatsoever: oil, gas,
gold, silver, platinum, industrial minerals, feldspar, orli-
thium, zirconium, vanadium, etc., ‘‘any commercial min-
eral whatever, we looked for,’’ (Tr. 222), but nothing of
commercial value was discovered.
In addition to the mineral examination, Schroter did an
extensive sand and gravel marketing study. He determined
that the relevant trade territory extended to San Bernardino,
20 miles to the south, and Victorville, 20 miles to the north
(Tr. 200-01). Schroter interviewed sand and gravel pro-
ducers who were supplying this area and acquired infor-
mation regarding the quality and quantity of the materials
they produced both at the present time and at the time that
common varieties of sand and gravel were withdrawn from
location. He also received information regarding haulage
rates, market prices, costs of production and the extent of
demand for sand and gravel in the trade territory (Tr. 205-
07).
Schroter determined from his investigation that except for
State highway projects underway during 1953-55 and 1968-
70, there were no major public projects under construction
requiring significant amounts of aggregate within a reason-
able distance from the subject claims (Tr. 221). During the
periods of limited demand when no State highway construc-
tion occurred, local producers in San Bernardino and Vic-
a a
torville were supplying high quality sand and gravel for use
in residential construction, streets and highways, manufac-
ture of sewer pipe, manufacture of ready-mix concrete, and
manufacture of transit mix concrete (Tr. 221).
The evidence presented at the hearing was inconclusive
regarding whether material from the subject claims was
suitable for use in the construction of the State highways.
Schroter testified that he examined State highway records
which indicated that the material in sections 14 and 23 was
unsuitable for use as mineral aggregates for road construc-
tion (Tr. 161). The State records indicate that land outside
of the area of the claims, in sections 13 and 23, was used
as a borrow pit for embankment material and for other low-
grade material requirements (Tr. 196-97). The appellants
argued that the material on the claims was suitable for high-
way construction as the State had waived its specification
requirements when marginal quality material was in close
proximity to the highway project (Tr. 1223).
In summary, Schroter determined that the sand to gravel
ratio on the claims was not in proper balance aid was below
minimum standards for commercial grade aggregate, the
claims were at a mileage disadvantage compared to estab-
lished commercial producers both in San Bernardino and
Victorville, there was no proven use or production record
for the materials on the claims, the established producers
were adequately supplying the needs of the relevant market
area with better quality material, and no other valuable
minerals existed on the claims which could be produced at
a profit (Tr. 224-26). Based on an analysis of the foregoing
factors, Schroter concluded that the deposits on the subject
claims as of July 23, 1955, and up until the time of the
hearing, could not have been mined, processed, removed
and sold at a profit in a sand and gravel operation alone,
or in a sand and gravel operation combined with production
of a valuable mineral byproduct (Tr. 225, 226, 231, 1267).
Contestants’ second witness was George Thwing, Mr.
M. Thwing received a degree in civil engineering in 1928,
and worked in the mining industry until 1938 when he went
into the sand and gravel business. He operated the Triangle
Rock and Gravel Company in San Bernardino, which pro-
duced sand and gravel and ready-mix material (Tr. 324-25).
In 1973 he retired from the company and is currently op-
erating as a business consultant. He was retained by the
contestants to make a study of and form an opinion on the
probability of developing a profitable sand and gravel op-
eration from the lands covered by the subject claims as of
July 23, 1955 (Tr. 328). He examined Schroter’s test results,
investigated the quality of and supply and demand for sand
and gravel in the market area, haulage rates, availability of
water for processing, specifications for commercial aggre-
gate, quality and quantity of material on the claims, and
concluded that it would not have been feasible to put a
commercial plant on the site and operate in the market that
was existing in 1955, or thereafter (Tr. 330, 345-46, 362).
He determined that the only possible use for the material
on the claims would be for low-grade fill material (Tr. 380).
Contestants’ final two witnesses were Edward J. Curtin
and Robert E. Hove. Mr. Curtin has been in the sand and
gravel business for 18 years and is presently employed as
manager of technical services for Owl Rock Products Com-
pany. Prior to this job he was employed by Owl Service
Rock Company in San Bernardino (Tr. 441-42). Curtin tes-
tified that contestee Richard Hutchinson approached Owl
Service Rock Company in 1967 with an offer to use the
sand and gravel on the subject claims for construction of
aggregates to be used in connection with the upcoming bids
for the Interstate 15 highway project (Tr. 445). Owl sampled
eens ihlanws
= =
the area and then entered into an option agreement which
for $1,000 granted the right to remove 500,000 tons of
material at a rate of 9¢ per ton for the first 100,000 tons,
and 8¢ per ton thereafter (Tr. 450). Owl solicited all the
general contractors who were bidding on the job but was
unsuccessful in securing a contract. Curtin testified that Owl
was not interested in the material for anything other than
the highway project, and thus chose not to exercise the
option (Tr. 457). He also expressed the view that based on
his experience in the industry, a commercial aggregate op-
eration could not have been installed within the area of the
subject claims as the quality of the material was poor and
the market was adequately covered by other producers (Tr.
457-58).
Mr. Hove is the owner-operator of a ready-mix concrete
and aggregate plant, Hi-Grade Materials Company, in Lu-
cerne, California. He has been in operation since 1955 and
Victorville is part of his marketing area (Tr. 472-73). He
testified that in 1969 he was approached by contestee Hutch-
inson regarding development of aggregates on the subject
claims. He sampled the area and had the samples sent to
the CHJ Materials Laboratory, Inc., San Bernardino, for
testing (Tr. 478). The test results indicated that the quality
of the material was too poor for commercial production,
and accordingly no agreement was executed (Tr. 482, Ex.
25).
For the appellants, both contestee Hutchinson and J. J.
Schwietert testified that in their opinion the subject claims
could be commercially exploited (Tr. 556-76, 1180-88).
Schwietert testified that for a period of ten years he had
been stockpiling material from the claims for the purpose
of seeing what materials were on the claims and to sell such
material if he could find a willing buyer (Tr. 570-72). He
never analyzed the quality of the material nor did he sell
hielo:
any of it, but he stated that he gave it away to friends for
use as foundation material (Tr. 576). James Maxwell Muir,
Jr., President of King Solomon Mining Corp., and a stock-
holder in Doria Mining and Engineering Corp., testified that
in his opinion it would have been commercially feasible in
1955 to install a $1,200,000 mill producing 600 tons per
day of aggregate material (Tr. 1061-65). He offered no
market or cost analyses to justify why such a project would
have been commercially feasible.
Shortly before the hearing, the Hazen Research Com-
pany, Golden, Colorado, a mining exploration and con-
sulting organization, was retained by the contestees to in-
vestigate the claims to determine what minerals could be
produced. The conclusion of the Hazen Report (Ex. B) is
that sand and gravel on the claims can be used in aggregates
and that feldspathic sand in the fines can be used in the
manufacturing of glass. The Hazen Report was prepared by
William T. Hamling, David D. Billings, and Ralph Paul
Meyerttons.
Hamling is a mining engineer employed by the Hazen
Company. His assignment was simply to take samples from
the claims; he did not analyze the material nor did he make
any investigation as to its marketability (Tr. 540-41). From
two of the claims, the Outlook and Old Sunny, Hamling
removed large, 120-gallon samples of material. From the
remaining 16 claims he took smaller, 5-gallon samples; in
some instances these latter samples represented 3-foot deep
streambed excavations. Hamling testified that the time al-
lotted for sampling was not sufficient to allow drilling a
hole on each claim, but he was of the opinion that such
drilling was unnecessary as the material in the general area
did not appear to vary greatly from one claim to the next
(Tr. 530-31).
ad | a
Billings is a self-employed glass technologist who was
called in to work with the Hazen Company to determine if
suitable feldspathic sand products could be extracted for use
in the glass industry (Tr. 612-20). He examined {]1/4]}
pound of material from the large samples (Tr. 760). Based
on his examination, he was of the opinion that given a 60%
recovery rate from the bank-run material, it would be fea-
sible to produce feldspathic sands for use in the Los Angeles
glass industry (Tr. 631-33).
On cross-examination, Billings’ opinion as to the com-
mercial feasibility of producing feldspathic sands became
fraught with qualifications and contingencies. He noted that
he had made no estimate of the cost of setting up a plant
(Tr. 652), he had not considered the cost of stripping
overburden (Tr. 795), nor the costs of disposing of waste
(Tr. 794). He assumed an ample water supply (Tr. 655),
and also assumed that the quality of the material did not
differ at different depths (Tr. 767). He did not know whether
there were ample reserves on the claims (Tr. 647).
He made two very significant qualifications for the pur-
poses of this decision. First, he did not analyze any of the
16 small samples and thus could only speculate and draw
inferences as to the feldspathic sand quality on 16 of the
claims. In these instances he recommended further sampling
and testing to determine the quantity and quality of feld-
spathic material (Tr. 775). On cross-examination he was
asked:
Q. Sir, as a glass technologist, would you consider
a mere visual inspection of samples from a potential
site sufficient to advise a client whether or not the
material would be acceptable as a glass sands com-
ponent in a glass batch operation?
A. No.
(Tr. 696).
ore. eee
Second, he noted that the relevant glass sand market was
being supplied by an operation at Mission Viejo near Cap-
istrano and by an operation at Del Monte, California. The
Mission Viejo mine, which at the time of the hearing was
shut down for an indefinite period, served approximately
75% of the market (Tr. 803), and had estimated reserves
for a 50-year period (Tr. 647). Billings testified that given
the market situation, a successful glass sands operation was
contingent upon getting long-term commitments from po-
tential customers (Tr. 776). He recommended that before
investing any money in such an operation, it would be
advisable to determine when the Mission Viejo mine was
going back into production (Tr. 637), and to have potential
customers examine the material on the subject claims to see
if it fit their particular needs (Tr. 630, 780). Neither the
appellants nor the Hazen Company contacted any producers
or users of feldspathic sand to determine whether the prod-
ucts from the subject claims could be marketed. Billings
testified that a plant capable of processing 100 tons per day
would have cost $250,000 to $350,000 in 1955 (Tr. 662).
James Maxwell Muir, Jr. placed the cost of a plant at $2,000
per ton in 1955 and $3,000 per ton in 1973, or $1,200,000
and $1,800,000, respectively, for a 600 ton per day plant
(Tr. 1061, 1064). Schroter testified that a 100 ton per day
plant producing both sand and gravel and feldspathic sand
would cost $850,000 (Tr. 1284).
Meyertons is a mining and metallurgical engineer em-
ployed by the Hazen Company (Tr. 816). Meyertons tes-
tified that he visually examined the 16 small samples and
was Satisfied that the mineral content would be reasonably
the same from sample to sample (Tr. 846). He did note,
however, that had there been more time he would have
further analyzed the 16 small samples (Tr. 859). Following
an initial analysis of the two larger samples, Meyertons
= aa
decided to abandon the search for gold, silver and other
precious metals (Tr. 882), and limit the examination to
feldspar products (Tr. 883). Meyertons sent a portion of the
large samples to Pacific Materials Laboratory, Inc., Bloom-
ington, California, for an evaluation of the suitability of the
material for use as an aggregate (Tr. 829). The test results
indicated that the material was of poor quality (Ex. 27).
Meyertons testified that the Hazen Report showed that
the feldspathic sand found in the samples tested was of
sufficient quality to be used in the glass industry. He noted,
however, that the potential inaccuracy in the total feldspar
determination could be as much as 20% on the samples
tested (Tr. 938), and that additional variances could occur
with respect to the 16 untested samples. Accordingly, he
recommended additional sampling and testing of the ma-
terials on the claims (Tr. 859, 945-46). A flow sheet was
developed to show in a preliminary fashion how products
could be produced in a sand and gravel and glass sand
operation (Tr. 836). The report was in essence a technical
feasibility study, not a marketability study.
Appellants’ last witness was J. Mark Longfield. Mr.
Longfield is a consultant for construction aggregate busi-
nesses and has been involved in the sand and gravel industry
since 1964 (Tr. 1219). His opinion was limited to the mar-
ketability of sand and gravel only. Longfield viewed the
claims and in his opinion the material thereon was ‘‘mar-
ginal’’ (Tr. 1222). After studying the relevant market he
testified that aside from the highway projects, very little
demand existed in the Victorville area until 1965, and while
there was some.activity in the Hesperia-Apple Valley area,
this was adequately covered by local producers (Tr. 1238).
He also testified that appellants could not compete in the
San Bernardino area because the rock being supplied there
was of superior quality. Based on these factors he concluded
a
that a sand and gravel operation could not have been prof-
itable either in 1955 or at any time up to the hearing (Tr.
1241). He did testify, however, that an operation might be
successful if a co-product was produced in conjunction with
sand and gravel (Tr. 1241). He was not an expert, however,
with regard to the production of feldspathic sand and stated
that he had no opinion as to whether in 1955 a sand and
gravel and feldspathic sand operation could have produced
and sold material at a profit (Tr. 1251).
The basic principles of law applicable to this case are
now well established and need no extensive elaboration. For
a mining claim to be valid there must be discovered on the
claim a valuable mineral deposit. A discovery exists
* * * where minerals have been found and the evi-
dence is of such a character that a person of ordinary
prudence would be justified in the further 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 test, the prudent
man rule, has been refined to require a showing that the
mineral in question can be extracted, removed and presently
marketed at a profit, the so-called marketability test. United
States v. Coleman, supra. This present marketability can
be demonstrated by a favorable showing as to such factors
as the accessibility of the deposit, bona fides in develop-
ment, proximity to market, and the existence of a present
demand. The marketability test has been specifically held
to be applicable in determining the validity of sand and
gravel claims. Palmer v. Dredge Corp., 398 F.2d 791 (9th
Cir. 1968), cert. denied, 393 U.S. 1066 (1969); Foster v.
Seaton, supra.
[4] The parties to this proceeding stipulated that the sand
and gravel on the claims was to be treated as a common
= SS
variety material located prior to the withdrawal of such
materials (Tr. 144-45). Since Congress withdrew common
varieties of sand and gravel from location under the mining
laws on July 23, 1955, 30 U.S.C. §611 (1970), it is in-
cumbent upon one who located a claim prior to that date
for a common variety of sand and gravel to show that all
the requirements for a discovery, including a showing that
the materials could have been extracted, removed, and mar-
keted at a profit, had been met by that date. United States
v. Barrows, 404 F.2d 749 (9th Cir. 1968), cert. denied,
394 U.S. 974 (1969); Palmer v. Dredge Corp., supra;
United States v. Clear Gravel Enterprises, Inc., supra. This
entails a showing of the market which then existed, the cost
of extraction and processing which would have been in-
curred, the transportation charges which would have been
involved, the unit price which then prevailed and the profit
which the claimants might have realized if they had elected
to proceed at that time. United States v. Gibbs, 13 IBLA
382, 391 (1973).
The evidence presented at the hearing clearly established
that the sand and gravel on the subject claims was of inferior
quality and was not acceptable for the type of work being
done in the relevant market from the period 1955 to the
hearing. During that period deposits of superior quality were
being actively exploited in the area and there was only a
limited local demand for sand and gravel. Under such cir-
cumstances, no discovery of sand and gravel existed on
appellants’ claims. Barrows v. Hickel, 447 F.2d 80, 83 (9th
Cir. 1971). It is of no consequence that appellant Hutchinson
gave material from the claims to his friends at no cost. It
has been held that the disposal of substantial quantities of
sand and gravel at no profit does not demonstrate the ex-
istence of a market for the material which would induce a
—_
man of ordinary prudence to expend his means in an attempt
to develop a mine on his claims. Barrows v. Hickel, supra.
The above finding disposes of the contestees’ assertion
that the Calnev and State rights-of-way are in derogation
of their mining claims. The rights-of-way were granted in
1961, 1968 and 1970. Since the mining claims during those
periods (and beyond) were at most valuable only for sand
and gravel, the finding that the claims were invalid as sand
and gravel claims as of the dates when the rights-of-way
issued requires a conclusion that the claims, even if later
validated, would be subject to the rights-of-way and not
vice versa as the contestees contend.
[5] The land, however, remained open to mineral loca-
tion subject to the rights-of-way. See A. W. Schunk, 16
IBLA 191, 195 (1974); Solicitor’s Opinion, 67 1.D. 225,
228 (1960). Therefore, we must examine whether a dis-
covery after 1970 validated the claims. The only valuable
mineral suggested by the record is the possibility of a dis-
covery of feldspathic sands suitable for making glass. For
this purpose we assume that sands suitable for glassmaking
are not a common variety material. United States v. Kosanke
Sand Corp., 12 IBLA 282, 305-08, 80 1.D. 538, 549 (1973);
United States v. Pierce, 75 1.D. 270, 281 (1968). Two
requirements of law dispose of this issue. First, where min-
ing claimants are seeking to validate a group of claims, they
must show that a valuable mineral deposit exists on each
claim. A showing that all of the claims taken as a group
satisfy the requirements of discovery is not sufficient.
United States v. Colonna and Company of Colorado, Inc.,
14 IBLA 220, 226 (1974); United States v. Harper, 8 IBLA
357, 368 (1972). Here, only material from two of the claims
was actually analyzed by the Hazen Company. Appellants’
experts admitted that variations in the quality and quantity
of feldspathic sands could occur on the remaining 16 claims.
an, ae
It is axiomatic, we believe, that prudent men do not invest
their money in attempting to develop a mine without some
evidence that the mineral which they seek to exploit exists
in such quality and quantity as to permit the recovery of
their capital outlay with a profit. Accordingly, it was proper
to conclude that the 16 unanalyzed claims were not shown
to have discovery of a valuable deposit of feldspathic sands.
[6] Second, the Department recognizes a distinct differ-
ence between exploration and discovery under the mining
laws. Exploratory work is that which is done prior to dis-
covery in an effort to determine whether the land contains
valuable minerals. Where minerals are found, it is often
necessary to do further exploratory work to determine
whether those minerals have value and, where the minerals
are of low value, there must be more exploration work to
determine whether those minerals exist in such quantity and
quality that there is a reasonable prospect of success in
developing a paying mine. Only when the exploratory work
shows such a reasonable prospect of success can it be said
that a prudent man would be justified in going ahead with
his development work and that a discovery has been made.
United States v. Converse, 72 1.D. 141, 149 (1965), affd,
Converse v. Udall, 399 F.2d 616 (9th Cir. 1968), cert.
denied, 393 U.S. 1025 (1969). In this proceeding, all of
appellants’ experts testified that their examinations were
preliminary and that further testing would have to be ac-
complished before recommending that production occur on
any of the claims. Appellants were thus still at the explor-
atory stage. We note again that appellants had not yet
reached the stage of developing an analysis of the market-
ability of the feldspathic sands on the claims. As Admin-
istrative Law Judge Holt said in his decision (at 8):
The Hazen report is based on a chemical analysis of
one sample from one claim and a visual examination
of samples from each of the other claims. The flow
sheet and plan of operation require the utilization of
the sand and gravel for all purposes. Since the De-
partment has held that the common variety materials
can not be used, it is only the feldspathic sand that is
subject to location. There was no evidence that this
latter material could be economically utilized by itself
and no attempt has been made to determine whether
it could compete in the existing market. No prudent
man would invest his time and means developing any
one of the claims until the technology of processing
the feldspathic sand has been completed and a reason-
ably accurate estimation has been made of the cost of
production. Until this has been completed there is no
way of determining whether the material could compete
in the existing market.
[7] There has not been a discovery of feldspathic sands
suitable for use in making glass where, although such min-
eral has been found within the limits of the claims, the
evidence is not of such a character that a person of ordinary
prudence would be justified in the further expenditure of
his labor and means with a reasonable prospect of success
in developing the property. United States v. Duval, 1 IBLA
103 (1970), aff d Duval v. Morton, No. 72-2839 (9th Cir.
December 19, 1973), aff g Duval-v. Morton, 347 F. Supp.
501 (D. Ore. 1972). Accordingly, we conclude that all of
the claims were properly declared null and void.°
‘In their brief on appeal, appellants place great reliance on United
States v. Kosanke Sand ¢ Corp., 3 IBLA 189 (1971), which upheld the
validity of claims located for feldspathic sands. That decision was later
set aside and remanded by this Board. United States v. Kosanke Sand
Corp., 12 IBLA 282, 80 1.D. 535 (1973). The facts in the Kosanke
proceeding are clearly distinguishable from the ones at hand. In Ko-
sanke, the exploration of the claims, technique for processing of the
sand, existence of a possible market, suitability of the sand for use in
glassmaking, all had progressed much further than in this case, yet
Kosanke was remanded for a hearing to develop further evidence as to
the quality and quantity of the silica sand on each claim, the amount
of each grade of sand on each claim, the market for each grade, the
proposed flotation process for beneficiating the silica sand, and trans-
portation costs. The evidence in this case falls so far short of that
offered in Kosanke as to leave no doubt that the validity of the claims
has not been established.
palate ITE as :
[8] In their final argument on appeal, appellants charge
that the Administrative Law Judge improperly denied their
motion to reopen the proceedings for the purpose of intro-
ducing new evidence. Appellants allege that they have evi-
dence that will establish the fact that the State of California
and its contractors used substantial quantities of sand and
gravel from appellants’ claims during the course of the con-
struction of the highway projects in 1954-55 and 1968-70.
In denying the motion, Judge Holt stated the following:
In the recent decision of United States v. A.E. Kot-
tinger, et al., 14 IBLA 10 (November 27, 1973), the
Board held (syllabus):
Where the preponderance of the evidence in a
contest hearing does not show the existence of a
reasonably continuous profitable market for a com-
mon variety of sand and gravel from a mining claim,
from 1955 to the time of the hearing, the claimants
have failed to show a discovery.
This ruling was supported by both administrative and
judicial decisions.’
*In Kottinger, supra at 13, we quoted the following from United
States v. Charleston Stone Products, 9 IBLA 94, 100 (1973):
[T]he 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 contest proceedings a
market for the * * * mineral has continued without any prolonged
interruption * * *. [I]f the marketability of the common variety
mineral for which the claim was located is lost, the validity of
the location is similarly lost * * *. United States v. Estate of Alvis
F. Denison, 76 1.D. 223 (1969); Mulkern v. Hammit, 326 F.2d
896 (9th Cir. 1964). [L]ater recovery of a profitable market cannot
serve to resuscitate such invalid claims. .
Judicial review of the Charleston case has been sought, Charleston
Stone Products Co., Inc. v. Morton, Civil No. LV-2039-BRT, currently
pending before the United States District Court for the District of Ne-
vada. See also United States v. Johnson, 16 IBLA 234 (1974); United
States v. Winegar, 16 IBLA 112, 81 I.D. 370 (1974).
_— ow
Under the Kottinger decision it was incumbent on
the contestees to establish that there was a ‘‘reasonably
continuous profitable market’’ for the sand and gravel
on the claims from 1955 to 1972. Assuming that there
was a profitable market for the sand and gravel on one
or more of the claims for the periods 1954-1955, and
1968-1970, the gap between 1955 and 1968 is fatal to
the contestees’ contention of validity.
Accordingly, the motion to reopen the hearing is
denied.
For the reasons stated, the Judge was correct in denying
appellants’ motion.
Therefore, pursuant to the authority delegated to the
Board of Land Appeals by the Secretary of the Interior, 43
CFR 4.1, the decision below is affirmed.
/s/ Martin Ritvo
Martin Ritvo
Administrative Judge.
We concur:
/s/ Douglas E. Henriques
Douglas E. Henriques
Administrative Judge
/s/ Edward W. Stuebing
Edward W. Stuebing
Administrative Judge
cere ra em 5 2 eee
Name
1) Sand Bank
2) Harbor
3) Many Stones
4) Wild Trail
5) Buck Shot
6) Old Sunny
7) Outlook
8) Delight
9) Sunshine
10) Baldy
11) Hawk
12) Old Blister
13) Clear View
14) Buster
15) Lizard Gulch
16) Mesquite
17) Barren
18) Rattler
a
APPENDIX A
Date of Location
March 1, 1953
March 1, 1953
March 1, 1953
March 1, 1953
March 1, 1953
March 1, 1953
January 5, 1955
January 5, 1955
January 5, 1955
January 5, 1955
January 5, 1955
March 1, 1953
March 1, 1953
March 1, 1953
Juiy 12, 1955
July 12, 1955
July 12, 1955
- July 12, 1955
Legal Description
NW % of NW 4, Sec. 14,
T.3 N., R. 6 W., SBM
SW Y% of NW ¥% Sec. 14,
T. 3 N., R. 6 W., SBM
NW % of SW 4, Sec. 14,
T. 3 N., R. 6 W., SBM
SW % of SW %, Sec. 14,
T. 3 N., R. 6 W., SBM
NE % of SW % Sec. 14,
T. 3. N., R. 6 W., SBM
SE % of SW 4, Sec. 14,
T.3 N., R. 6 W., SBM
NE % of NW %4, Sec. 14,
T.3 N., R. 6 W., SBM
NW % of NE % Sec. 14,
T. 3 N., R. 6 W., SBM
NE % of NE %, Sec. 14,
T.3 N., R. 6 W., SBM
SE % of NE %4, Sec. 14,
T. 3 N., R. 6 W., SBM
SE 4 of NE %, Sec. 14,
T.3 N., R. 6 W., SBM
NE % of SE %, Sec. 14,
T.3 N., R. 6 W., SBM
SW % of SE %4, Sec. 14,
T. 3 N., R. 6 W., SBM
SE % of SE %, Sec. 14,
T. 3 N., R. 6 W., SBM
NE % of NW %, Sec. 23,
T. 3 N., R. 6 W., SBM
NW '%s of NW 4, Sec. 23,
T.3 N., R. 6 W., SBM
SW 4 of NW 4, Sec. 14,
T. 3 N., R. 6 W., SBM
SE % of NW %, Sec. 23,
T. 3 N., R. 6 W., SBM
_
APPENDIX ‘‘D’’.
28 U.S.C. § 1331(a).
‘‘(a) The district courts shall have original jurisdiction of
all civil actions wherein the matter in controversy exceeds
the sum or value of $10,000, exclusive of interest and costs,
and arises under the Constitution, laws, or treaties of the
United States except that no such sum or value shall be
required in any such action brought against the United
States, any agency thereof, or any officer or employee
thereof in his official capacity.
9°
,
!
MR Tel be PS see
_— He
APPENDIX ‘‘E”’.
30 U.S.C. § 22.
‘‘Except as otherwise provided, all valuable mineral de-
posits 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 occu-
pation and purchase, by citizens of the United States and
those who have declared their intention to become such,
under regulations prescribed by law, and according to the
local customs or rules of miners in the several mining dis-
tricts, so far as the same are applicable and not inconsistent
with the laws of the United States.’’
30 U.S.C. § 35.
*‘Claims usually called ‘placers,’ including all forms of
deposit, excepting veins of quartz, or other rock in place,
shall be subject to entry and patent, under like circumstances
and conditions, and upon similar proceedings, as are pro-
vided for vein or lode claims; but where the lands have been
previously surveyed by the United States the entry in its
exterior limits shall conform to the legal subdivision of the
public lands... .”’
30 U.S.C. § 611. |
SUBCHAPTER II. — MINING LOCATIONS
‘‘No deposit of common varieties of sand, stone, gravel,
pumice, pumicite, or cinders and no deposit 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 mining claim hereafter located
under such mining laws: Provided, however, That nothing
herein shall affect the validity of any mining location based
upon discovery of some other mineral occurring in or in
association with such a deposit. ‘Common varieties’ as used
"oN
in sections 601, 603, and 611 to 615 of this title does not
include deposits of such materials which are valuable be-
cause the deposit has some property giving it distinct and
special value and does not include so-called ‘‘block pum-
ice’’ which occurs in nature in pieces having one dimension
of two inches or more. ‘Petrified wood’ as used in sections
601, 603, and 611 to 615 of this title means agatized, opal-
ized, petrified, or silicified wood, or any material formed
by the replacement of wood by silica or other matter.’’
we Ba
APPENDIX ‘‘F”’’.
5 U.S.C. § 706.
‘*To the extent necessary to decision and when presented,
the reviewing court shall decide all relevant questions of
law, interpret constitutional and statutory provisions, and
determine the meaning or applicability of the terms of an
agency action. The reviewing court shall —
(1) compel agency action unlawfully withheld or
unreasonably delayed; and
(2) hold unlawful and set aside agency action, find-
ings, and conclusions found to be —
(A) arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law;
(B) contrary to constitutional right, pene, priv-
ilege, or immunity;
(C) in excess of statutory jurisdiction, authority,
or limitations, or short of statutory right;
(D) without observance of procedure required by
law;
(E) unsupported by substantial evidence in a case
subject to sections 556 and 557 of this title or oth-
erwise reviewed on the record of an agency hearing
provided by statute; or
(F) unwarranted by the facts to the extent that the
facts are subject to trial de novo by the reviewing
court.
In making the foregoing determinations, the court shall re-
view the whole record or those parts of it cited by a party,
and wos account shall be taken of the rule of prejudicial
error.’
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.