Petition for Writ of Certiorari — Mendenhall v. United States

84-718 Geemexn

FELED

Number A-194 now S 1084

ALEXANDER L. STEVAS

CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1984

Robert L. Mendenhall, Petitioner,

vs.

The United States of America, The United States

Department of the Interior, and Cecil D. Andrus,

Secretary of the Interior and Edward F. Spang,

State Director of the Nevada Office of the

Bureau of Land Management, Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

Petition for Writ of Certiorari

Hale C. Tognoni

Suite 1260

100 West Clarendon Avenue

Phoenix, Arizona 85013

Counsel for Petitioner

Questions Presented for Review

1. Has Respondent, in administering

the mining law, applied a standard of

"discovery" wholly outside judicial

interpretation and in opposition to the

intent of Congress and the purpose of the

mining laws?

2. Does due process require that

agency discretion be judicially reviewed as

to the facts in a condemnation without

compensation and with no higher purpose

contemplated for the condemed property?

Table of Contents

Questions presented for review............1l

ee rrr CP. 6 og no 6 0060s sees eeeeeee

a -§ 2 66660666666666606086066 seca

Ee ee e*eeeee#eee#ee#e#e 6

Citations for opinions delivered in the

Courts and the Interior Dept..........8

ee ee 8 8 og gg ng 6666 06666606668606068

Constitutional Provisions and Statututes

De cece eeee SECC CC SE OCC SEOCseSCEE

Btatement OF the COSSccccrccseses rrerTrrTers

First Reason for Allowance of the Writ...21]

Second Reason for Allowance of the Writ..38

TABLE OF AUTHORITIES

CASES PAGE

Arkla Exploration Co. and the State of

Arkansas v. Arkansas - Texas Oil and Gas

Corporation and James G. Watt..........6- 35

734 F.2d 347 (1984)

Best v. Humboldt*®......... oo ee 2 38-9,41-2,44

371 U.S. 334, 335 (1963)

Book v. Justice Mining Co.......ceeeneees 26

58 F. 106, 124-25 (C.C.D. Nev. 1893)

Bowen Vv. Sil Flowccccccccccccccces Terereey i.

1969, 451 P.2d 626, 9 Ariz. App. 268

Use Vo BOVIS cccccccescccs poecececesscesee

519 F.2d 551 (9th Cir. 1975)

Castle v. Womble......cccceceese eccescecee 27

19 Pub. Lands Dec. 455 (1894)

Charlestone Stone Ve UeBeocccccccecesechtsda

Dist. Ct. Nev., Civ.No. LV 2039 BRT,

decided Nov. 7, 1974; Ninth Cir. Ct.

No. 75-1532, decided May 12, 1977;

order clarifying remand, Jan. 3,

1979.

U.S. Ve Coleman... oe TEEEEEELECEEET? . Trt

Cal. 1968, 88 S.Ct. 1327, 390 U.S.

599, rehearing den. 88 S.Ct. 1834,

391 U.S. 961, cert. den. 89 S.Ct.

1047, 394 U.S. 907

° Recent U.S. Supreme Court cases in Boldface Print

=9-

Creede & Cripple Creek v. Uinta.......... 23

Colo.1905, 25 S.Ct.266, 196 U.S. 337

Chrisman v. Miller...cccccccccccccccceedtys29

197 U.S. 313 (1905)

oF Fa A’) |) ReeereeererrrrrrereTs 02 0 4§

24 F. 108 (D. Idaho 1928)

BGWOPGS VY. BlOWOSecccceccccescccccecsccsecsde

588 F.2d 671, 673 (9th Cir. 1978)

FOSter V. SEACON. cccccccccccccsccccccceddg Sl

Dist. Ct. of App., D.C., No. 14953,

decided Oct. 22, 1959

Wole Wo GMMR. coccessescececes TeTTTTITT 25

Arizona Contest Nos. A-035688 and

A-035690 (1973)

Heydenfeldt v. Daney.......eeeees eccccecs 23

Nev. 1877, 93 U.S. 634

BOlW TRIBLCW VW. Dabacocccececceccccccececs 37

143 U.S. 457, 459 (1892)

U.S. ex rel. U.S. Borax Co. v. Ickes.....23

1938, 98 F.2d 271, 68 App. D.C. 399,

cert. den. 59 S.Ct. 80, 305, U.S.

619.

U.S. V. JONNSON. ccccccecccccscccces ececscecdd

IBLA 78-507 (Feb. 28, 1979)

Madison D. Locke v. Watt....cceeeeeeeees ~42

U.S. Dist. Ct., Nev., Civil R-82-297

BRT, decided Oct. 21, 1983, S.Ct.

cert. for Oct., 1984

McKinley v. Wheeler... cccccccccscccsesesendd

Colo. 1888, 9 S.Ct. 638, 130 U.S. 630

Melluzzo v. Morton.....ccecees TTTTTLTLITT 30

534 F.2d 860, 862-863 (9th Cir.

1976)

Montana Ry. Co. v. Warren....cececesecees 40

137 U.S. 348, 352-53 (1890)

Morrissey v. Brewer....... TrETTTTT 41,42,46

408 U.S. 471, 481-482 (1972)

Wee Vo MOMULSPAc cccccccccsccecsccccscess 49

403 F.2d 816, 823 (9th Cir. 1968)

UB. Vo RiSBiNEldiccccccecccsecesscecse 23,47

D.C. Idaho 1910, 182 F. 675

U.S. Vo SAYGOP, Ot Blecccccccccccccescces 33

U.S. Dist. Ct., Colo., Civil Action

No. 66-C-131, decided April 18,

1967; 10th Cir. Ct. appeal, decided

May 24, 1969.

Steel vw. Smelt ine Co.ccccccccccecccscecsce 23

Colo. 1882, 1 S.Ct. 389, 106 U.S. 477

Verrue v. U.S..... TETETECELECEEEEEE EEE 29

457 F.2d 1202 (1972)

Western Mining Council v. Watt........... 42

643 F.2d 618, 628 (1981)

Wilber v. U.S. ex rel. Krushnic.......... 41

280 U.S. 306, 317 (1930)

Zeigler v. S.& N. Ala. R.R. CO... eeeeeee 40

58 Ala. 594, 599 (1877)

is

STATUTES

Mineral Lands and Mining - Title 30

BSGCiOR BSecccaacccccacecceschB, 33,387,685

BOGCEOM BGs oc ccccescosvscecessseseseeell

BOSCIGR LSlenccccccccesesesccecsecescehe

BOOCLOR SL). wc ccccccvscesvecsessesel®, M4

| OPE eee eer

BOGTEOR BGs ss cwewasavcssdecocsenesesste

General Mining Regulations of the Bureau

of Land Management - Title 43

Section 185.1 ge fe errr r TST Se

OTHER

Governmen* Accounting Office Report,

GAO/RCED-84-17, August 2, ee |

Hansen, Clinton J., "Why Location

Systems for Hard Minerals," Rocky

Mountain Mineral Law Institute.......34

J. Adams & Barringer The Law of Mines

and Mining in the United States, 188

sg re ee eee

Laws of Nevada, Seventh Sess., Chap.

LVII, "An Act to encourage the

mining, milling, smelting, or other

reduction of ores in the State of

Nevada,"approved March 1, 1875.-

p.48 herein of petition.

CITATIONS FOR OPINIONS

DELIVERED IN “HE COURTS AND

THE INTERIOR DEPARTMENT

U.S. v. Frank Sullivan, Nevada No.

065733

U.S. Vv. Sullivan, I.B.L.A. 72-273,

9 I.B.L.A. 278

Robert L. Mendenhall vy. U.S.,

Dist. Ct. Nevada,CV-R-80-146-ECR (1982)

Mendenhall v. U.S., Ninth Cir.

Ct. of Appeals, No. 83-1751 (1984);

Rehearing denied June 28, 1984.

JURISDICTION

The United States District Court

for the District of Nevada had juris-

diction over this matter by virtue of

the Administrative Procedures Act, 5

U.S.C. Section 701, et seq. and 28

U.S.C. Section 1331, et seq., which

authorize and restrict judicial review

of a decision by an administrative law

judge and the Interior Board of Land

Appeals.

The judgment of the Court of

Appeals for the Ninth Circuit, affirming

the Federal District Court, was entered

on May 1, 1984. Petition for rehearing

was denied by order dated June 28,1984.

Orders Extending Time to File

Petition for Writ of Certiorari were

granted by Associate Justice of the

Supreme Court of the United States,

William H. Rehnquist. This petition for

Certiorari is timely filed on or before

the extension dates granted in said

orders, first to October 26, 1984, then

to November 5, 1984.

This courts' jurisdiction is

invoked under 28 U.S.C. Section i254

(1), and the Fifth Amendment of the U.S.

Constitution.

ye ee ee

CONSTITUTIONAL PROVISION

and

STATUTES INVOLVED

Constitutional Amendment V

No person .. . shall be deprived of

life, liberty, or property, without

due process of law; nor shall

private property be taken for public

use, without just compensation.

30 U.S.C.§21, 22, 26,& 35 -CHAPTER 2

Mineral Lands and Regulations in

General. §22 is set forth below:

§ 22. Lands open to purchase by

citizens

Except as otherwise provided, all

valuable mineral deposits in lands

belonging to the United States, both

Surveyed and unsurveyed, shall be

free and open to exploration and

purchase, and the lands in which

they are found to occupation and

purchase, by citizens of the United

States and those who have declared

their intention to become such,

under regulations prescribed by law,

and according to the local customs

or rules of miners in the several

mining districts, so far as the same

are applicable and not inconsistent

with the laws of the United States.

R.S. Section 2319; Feb. 25, 1920, ec.

85 Section 1,41 Stat. 437.

-ll-

30 U.S.C.A. Section 161 (known as

the Building Stone Act)

$161. Entry of building stone

lands; previcus law unaffected

Any person authorized to enter lands

under the mining laws of the United

States may enter lands that are

chiefly valuable for building stone

under the provisions of the law in

relation to placer mineral claims.

Lands reserved for the benefit of

the public schools or donated to any

States shall not be subject to entry

under this section. Nothing

contained in this section shall be

construed to repeal section 471 of

Title 16 relating to the

establishment of national forests.

Aug. 4, 1892, ¢. 375, §§ 1, 3, 27

Stat. 348

30 U.S.C.A. Section 611 (known as

the Common Varieties Act).

$611. - Common varieties of sand,

stone, gravel, pumice, pumicite, or

cinders and petrified wood.

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

-12-

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 in

sections 601, 603, and 611 to 615 of

this title does not include deposits

of such materials which are valuable

because the deposit has some

property giving it distinct and

special value and does not include

so-called "block pumice" which

occurs in nature in pieces having

one dimension of two inches or

more. "Petrified wood" as used in

sections 601, 603, and 611 to 615 of

this title means agatized, opalized,

petrified, or silicified wood, or

any material formed by the replace-

ment of wood by silica or other

matter.

July 23, 1955, e¢. 375, Section 3, 69

Stat. 368; Sept. 18, 1962, Pub. L.

87-713, Section 1, 76 Stat. 652.

-13-

yp ge, Papas ea debe "

STATEMENT OF THE CASE

Petitioner purchased the unpatented

mining claims hereinafter referred to as

the Charleston 24/39 located

approximately 12 road miles northwest of

the city of Las Vegas. The claims, more

particularly described in the records of

the Bureau of Land Management, were

located by E.H. Brawner, et. al. on

February 28, 1955, and were part of a

group known collectively as the |

"Charleston Claims". Frank R. Sullivan

acquired the "Charleston Claims" on

April 9, 1959. Sullivan mined in the

area and subsequently quitclaimed a

large group of Charleston claims, not

including the Charleston 24/39, to

Charlestone Stone Products Co.

In 1965, Donald G. Fisher, a mining

engineer employed by Respondent to

examine mining claims in the Las Vegas

area and to invalidate those in

-14-

violation of Title 30 U.S.C., §611,

reported that the Charleston claims were

invalid for want of a "discovery".

Consequently, Respondent brought

contests against Charlestone Stone

Products Co. and Petitioners'

predecessor, Frank R. Sullivan. Fisher

testified in the Bureau of Land

Management (BLM) hearing against

Charlestone Stone Products Co. but was

transferred to another area department

of the BLM before the hearing in U.S. v.

Frank Sullivan!. He was replaced by

Thomas E. Schessler as Lands and

Minerals staff Officer with the Las

Vegas District of the BLM, to become

sole witness against the Sullivan

claims. In both U.S. v. Charlestone and

U.S. vs. Sullivan, the hearing examiner

l. U.S. v. Frank Sullivan, Nevada No. 065733

-15-

ruled the Charleston claims null and

void and the Interior Board of Land

Appeals affirmed.

Upon judicial review in Charlestone

Stone Products Co. v. Morton2 the

District Court ruled that at least

sixteen of the Charlestone claims were

valid. On May 12, 1979, in Charlestone

Stone Products v. U.S.,° the higher

court concurred, reversing Respondent's

invalidation of the mineral discovery.

Andrus v. Charlestone Stone Products

Co.4 followed; but the Supreme Court

decided only that water on the

Charlestone claims was not locatable

2. Charlestone Stone Products Co. v. Morton, Civil No.

LV-2039 BRT (D. Nev., November 7, 1974)

3. Charlestone Stone Products v. U.S., No. 75-1532,

Ninth Cir. Ct. of Appeals, decided May 12, 1977;

order clarifying remand dated Jan. 3, 1979 (see

appendix).

4. Andrus v. Charlestone Stone Products Co., 436 US

604 (1978)

-16-

under Title 30 §22. In a June 28, 1978

letter, the U.S. Department of the

Interior, Office of the Solicitor, wrote

that the Supreme Court did not alter the

Ninth Circuit's holding with regard to

the mineral discovery on the Charlestone

claims and that the matter should be

remanded to the Department of the

Interior for further proceedings; and

the Ninth Circuit clarified its remand

on January 3, 1979. Patent for the

Charleston Nos. 1-22 mining claims was

subsequently applied for and granted.

Meanwhile, Petitioner, Robert L.

Mendenhall, had purchased from Sullivan

the Charleston 24/39 (see Mendenhall's

District Court Affidavit in appendix).

Mendenhall proceeded to mine the

aggregate from the Charleston 24/39 on a

large and profitable scale and evidence

presented in Robert L. Mendenhall v.

a. that special qualities of the

-17-

aggregate, which even Respondents expert

witness Schessler recognized, had

overcome any disadvantages of distance

from the market. The District Court

flew in the face of the fact that

Petitioner had developed a successful

mine on the Charleton 24/39, proving

Sullivan's "discovery"; and the court

ignored the findings of the Ninth

Circuit Court of Appeals in Charlestone

Stone Products, Ine. v. U. S., supra.

The District Court ruled that

Schessler's feeble contention that the

claims were too far from the market ever

to become anything, was substantial

evidence of no "discovery". On Appeal

the Ninth Circuit concurred, May l,

1984. From that decision this appeal is

made.

5. Robert L. Mendenhall v. U.S., Dist. Ct. Nevada, CV-

R-80-146-ECR, confirmed (see affidavit of geologist

and mining engineer, George Kiersch in appendix)

-18-

The land in question remains open

to mineral entry, so Petitioner has

exercised his right to stake new mining

claims on the discovery, but relying on

findings against Charleston 24/39, the

Respondent has instigated trespass

proceedings against Petitioner.

— a "

FIRST REASON FOR ALLOWANCE OF THE WRIT

1. Respondent, in administering the

mining laws, has been applying a

standard of "discovery" wholly

outside judicial interpretation and

in opposition to the intent of

Congress and the purpose of the

mining laws.

Before the first federal mining

laws were codified in 1866, the

importance of a "discovery" on the

claims was a matter of establishing

primacy of possessory right. Two

prospectors exploring in the same area

were often racing to be the first with a

mineral discovery around which one would

be entitled to stake his claim and

record it with the local mining

district. The federal statutory

authority for these mining claims

proceeded after the mining laws were

born of necessity in frontier mining

communities. In 1866, the federal

Dene Soar acres

ial baat aye EER tay om ch ge.

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REA Pati te Meet Be cpr olen nllacadll Dillan sahil S cari anit snd hates

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|

government gave statutory authority to

the principle that "all valuable mineral

deposits in lands belonging to the

United States... shall be free and open

to exploration and purchase. ® Congress

recognized the success of the miners'

own laws in facilitating the discovery

and development of the nation's mineral

resources.

The policy and general purpose

declared by Title 30, Section 22 of the

mining laws was to encourage as many

people as possible to assume the hazards

of searching for and extracting the

valuable minerals deposited in the

publie lands.

It was supposed that by reason of

the stimulus thus given to the

production of mineral wealth and

rendering the same available to

commerce and the arts, the public

6. Mineral Lands and Mining 30 U.S.C Section 22.

Quoted in entirety under "Statutes Involved" herein.

~2}-

would indirectly receive a

compensation commensurate with the

value of the grant. Thus

considered, the legislation was

approveg as embodying a wise public

policy.

The Courts have consistently

interpreted the intent of Congress to

have been to reward and encourage the

8

discovery of valuable minerals;” and

U.S. ex rel. U.S. Borax Co. v. Ickes?

removed any doubt as to the purpose

being restricted by lode or placer

qualifications of the mineral deposit.

The first federal statutes recognized

only a lode type of mining claim.

7. U.S. v. Rizzinelli, D.C. Idaho 1910, 182 F.675. See

also McKinley v. Wheeler, Colo. 1888, 9 S.Ct. 638,

130 U.S. 630.

8. Bowen v. Sil Flo, 1969, 451 P.2d 626, 9 Ariz.App. 268;

| Haydenfeldt v. Daney, Nev. 1877, 93 U.S. 634;

Creede & Cripple Creek v. Uinta Tunnel, Colo. 1905,

25 S. Ct. 266, 196 U.S. 337; Steel v. Smelting Co.,

Colo. 1882, 1 S.Ct. 389, 106 U.S. 477.

9. U.S. ex rel. U.S. Borax Co. v. Ickes, 1938, 98 F.2d

271, 68 App. D.C. 399, cert den 59 S. Ct. 80, 305 U.S.

619.

-22-

Placer claims became part of the

statutes thereafter, and Petitioner's

mineral deposit has been properly

tocated under the law for placer mining

claims. !9

The purpose of the federal mining

statute known as the "Common Varieties

Act" of July 23, 1955,!! is no different

than the purpose of the mining laws in

general. In U.S. v. Coleman!? in 1968,

the Supreme Court affirmed the

continuing intent of Congress to

encourage mining even in consideration

of common varieties of mineral. Within

the context of this purpose, the Common

Varieties Act was to solve a particular

10. Mineral Lands and Mining, Title 30, U.S.C., Sec. 35.

ll. Ibid., Title 30, U.S.C., Section 611, quoted in "Statutes

Involved" herein.

12. U.S. v. Coleman, Cal. 1968, 390 US 599, 88S Ct

1327, reh den. 391 US 961, 88 S Ct 1834, 391 U.S. 961,

cert den 89 S.Ct. 1014, 394 U.S. 907.

-23-

Ey ee ee ee eee

problem. According to testimony by

Clifford Young, member of Congress and

of the House Interior and Insular

Affairs Committee at the time the Act

was drafted:

", . ePeople were using the right to

locate mining claims for purposes

not connected with bonafide mining

purposes, .. . People would locate

claims for a cabin for recreational

purposes or to tie up a good trout

stream. Other land was located for

commercial purposes to establish a

site for a service station or curio

shop. .

The bill was strongly supported

by the mining industry ... they

wanted to preserve as large an area

as possible of the type of materials

that would be subject to a in

the traditional way .

The remedial legislation removed as

of July 23, 1955, "common varieties" of

mineral, specifically "sand, stone,

gravel, pumice, pumicite or cinders and

pertrified wood" from location under the

13. U.S. v. Guzman, Arizona Contest Nos. A-035688 and

A-035690 (1973).

-24-

mining laws. Even so, the Act exempted

"common varieties" having "distinct and

special value," leaving undisturbed the

idea that a discovery of valuable

mineral on the public lands should be

open to exploration and development by

bona fide prospectors.

In the administration of the Common

Varieties Act, however, the new effort

to define a "discovery" created

complexities wholly out of keeping with

the simple issue of good faith which the

act of July 23, 1955 and the mining laws

in general had intended.

In 1893,!4 the Courts first

interpreted the meaning of "valuable

mineral deposit" (30 U.S.C. Section

22). One year later in Castie v.

Nev. 1893).

Womble, !5 the land department enunciated

what would become known as the "prudent

man rule:"

"Where minerals have been found and

the evidence 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 . . . to hold otherwise would

tend to make of little avail, if not

entirely nugatory, that provision of

the law whereby "all vaiuable

mineral deposits in lands belonging

to the United States ...are...

declared to be free and open to

exploration and purchase. For, if

as soon as minerals are shown to

exist, and at any time during

exploration, before the returns

become renumerative, the lands are

to be subject to other disposition,

few would be found willing to risk

time and capital in an attempt to

bring to light and make available

the mineral wealth, which lies

concealed in the bowels of the

earth, as Congress obviously must

have intended the explorers should

have proper opportunity to do."

15. Castle v. Womble, 19 Pub. Lands Dec. 455 (1894)

approved by the Supreme Court in Chrisman v.

Miller, 197 U.S. 313 (1905).

-26- j

Petitioner's predecessor was the

only witness in his own behalf at the

hearing in U.S. v. Sullivan, Nevada No.

065733. The testimony leaves little

doubt that Sullivan was developing in

good faith what he called his "best

gravel" on the Charleston 24/39. He and

his predecessors before him and before

passage of the Common Varieties Act in

1955 had, in fact, made sales from the

Charleston claims. Sullivan's testimony

as to sales and development was

virtually unrebutted. Thomas E.

Schessler, sole witness for Respondent,

without benefit of supporting fact,

simply delivered the opinion that the

deposit was too far from the market to

justify "the expenditures of labor and

means, with a reasonable prospect of

success in developing a valuable mine."

Schessler had no knowledge of the

advantages which the special value of

-27-

the deposit had in the marketplace, nor

did he present any evidence that his

opinion was based on any but one of the

multitude of factors which effect the

market for a mineral. Furthermore,

according to Chrisman v. Miller, supra;

"Standards to be applied in

determining what a prudent

prospector would or would not do are

not those of a trained engineer or

geologist"

Verrue v. u.s. 16 should have con-

strained the Respondent from pursuing an

invalidation of Petitioner's mining

claims. In Verrue absence of actual

sales before the critical date of July

23, 1955, was not allowed to control in

determining marketability, although the

lack of sales was admittedly persuasive,

depending upon the facts of the

particular ease.!? Sullivan's testimony

16. Verrue v. U.S., 457 F.2d 1202 (1972).

-28-

in administrative hearing supported the

factual conclusion that sales had been

made from the Charleston claims prior to

July 23, 1955.

The idea that Mr. Schessler's

opinion could overcome substantial

evidence that Mr. Sullivan had made

sales to the market arose from

administrative habit involving claims

which were made in bad faith for "common

varieties". In the Las Vegas area

Foster v. Seaton!® is an example.

Foster did not present any evidence of

developing a mineral deposit, he simply

showed that there was sand and gravel on

the claims and that he could forsee

circumstances in the future which might

make it valuable. Out of cases like

17. Edwards v. Kle 588 F. 2d 671, 673 (9th Cir. 1978);

Melluzzo v. Morton, 534 F.2d 860-863 (9th Cir. 1976).

18. Foster v. Seaton, Dist. Ct. of App., D.C., No.14953,

decided Oct. 22, 1959 (see appendix).

-29-

Foster v. Seaton came what would be

called the "marketability test" whereby

a claimant was asked to prove that a

market for the deposit existed on July

23, 1955.

In U.S. v. Coleman, supra, the

Supreme Court approved the

"marketability test", but the Court

clearly found Coleman to be in bad

faith, and one other important fact of

the Coleman case was not shared by U.S.

v. Sullivan. Coleman was challenged

because he sought to purchase or patent

his mining claim. Sullivan did not

propose that he had proven his

"discovery" so conclusively as to

warrant the issue of a patent. After

his claim was invalidated, he continued

to develop what he believed to be a

deposit of valuable mineral, as is his

right under the mining laws; and he sold

the claim to Robert Mendenball,

-30-

Petitioner, who shared Sullivan's

evaluation of the deposit and proceeded

to develop a paying mine.

Evidence presented to the Federal

District Court (affidavits in appendix

of Petitioner and George Kiersch,

geologist and engineer) proved that the

Respondent erred in its invalidation of

Petitioner's claims. Furthermore, the

Appellate Court decision in Charlestone

Stone Products v. Secretary of the

Interior Cecil D. Andrus, supra,

disallowed probative value to the type

of mineral examination which

Respondent's witness conducted.

The Charlestone decision should

have effectively put an end to the habit

of Respondent making a prima facie case

out of the opinions of men like

Schessler, who are inexperienced in the

marketplace and who come into an area as

much as ten years after the period of

«9 }-

time about which they are asked to

testify.!9 Like Charlestone Stone

products, Petitioner is a good-faith

entryman on the public lands. In

addition the mineral deposit which the

Court validated in the Charlestone case

is the very same mineral for which

Petitioner's claims were located.

There can be little doubt that U.S.

v. Sullivan does not serve the purpose

of the mining laws. Does it contribute

to some alternative to free mining which

Respondent may be proposing for

developing the nation's mineral

resources? Maybe Respondent seeks to

administer the deposit by selling it to

the highest bidder or otherwise lease

19. U.S. v. Boyle 519 F.2d 551 (9th Cir. 1975); U.S v.

Jolanta, CEL a, LBLL.A. 78-507 (Feb,28,1979); U.S. v. Shyder

U.S. Dist. Ct., Dist of Colo., Civil Action No. 66-C-

131, decided Apr.8,1967; (10th Cir. Ct. decided May

24,1969).

the land for mining purposes. The Court

should be advised of the costs which

such programs by the Respondent have

encountered historically and today. In

1845, when President Polk considered the

cost of leasing the nation's lead mines,

he sold them. The amount collected in

lead mine rentals was exceeded by more

than four times for a four year period29

by the cost of administering the leasing

program.

The nation's gas and oil resources,

originally locatable under the mining

laws, have been under government leasing

programs since the early 1920's. The

United States now imports most of its

oil although it is common knowledge that

huge deposits remain to be developed

domestically. The Appellate Court in

20. Hansen, Clinton J., "Why a Location System for Hard

Minerals," (Rocky Mountain Mineral Law Institute).

-33-

Arkla Exploration Co. and the State of

Arkansas v. Arkansas-Texas Oil and Gas

Corporation and James G. Watt?! appears

to be attempting to hold Respondent

responsible for the failures of its

leasing program and a new Government

Accounting Office Report 22 concludes

that although reasonable in concept,

Respondent's emergency coal leasing

regulations have been "difficult to

administer within a competitive

framework."

Administration of the Common

Varieties Act in such a way as to

increase the number of mineral deposits

unavailable to those who would privately

explore and develop the nation's mineral

21. Arkla Exploration Co. and the State of Arkansas v.

Arkansas-1 exas Oil and Gas Corporation and James

22. Government Accounting Office Report, GAO/RCED-

84-17, August 2; 1984.

-34-

resources, is foolhardy and against the

intent of Congress and the

interpretation of the Common Varieties

Act by the Courts. Under the law,

deposits of valuable mineral on the

public lands are free and open to bona

fide mineral entryman like Petitioner.

Respondent, however, has succeeded in

convincing the Courts below that its

"marketability test", when applied to

mineral entryman who have provided

substantial evidence that they are in

good faith exploring and developing

mineral on the public lands, is within

the letter of the law. Clearly, the

purpose of the mining laws is not served

in approval by the Courts of U.S. v.

Sullivan. Petitioner urges the Supreme

Court to consider the familiar rule

"that a thing may be within the letter

of the statute and yet not within the

Statute, because not within its spirit,

~35-

nor within the intention of its

makers."22

22. Holy Trinity Church v. U.S., 143 U.S. 457, 459 (1892).

-36-

NR Cothturca 98

SECOND REASON FOR ALLOWANCE OF WRIT

2. Due process requires that agency

discretion be judicially reviewed as

to the facts in a condemnation

without compensation and with no

higher purpose contemplated for the

condemned property.

The mining laws have not changed in

their purpose since they were enacted,

but the laws are seldom fortified by

court interpretation because

increasingly the courts have elected to

refuse to review or rehear the facts.

The Courts below, in sympathy with

sovereign immunity, were willing to

leave agency discretion unchallenged in

U.S. v. Sullivan despite factual

evidence that Petitioner's property was

being unlawfully seized. Best v.

Humboldt Placer Mining Co. 24 has

24. Best v. Humboldt Placer Mining Co., 371 U.S. 334,

335 (1963).

frequently been relied upon for court

approval of land agency immunity.

According to Best v. Humboldt:

If a patent has not issued, contro-

versies over mining claims should be

solved by appeal to the Land Depart-

ment and not to the courts.

In Best v. Humboldt, the

invalidated mining claims were to become

part of the Trinity River Dam and

Reservoir in California. The |

invalidation proceedings on the Humboldt

claims were for purposes of determining

whether a property right existed for

which compensation was due. Petitioner

has not been advised of the modicum of

proof which Respondent required of

Humboldt Placer Mining Co., but where

Best _v. Humboldt has shielded the

Department of the Interior from making

compensation for the taking of mining

claims which have been developed in good

faith, Petitioner wishes to supply a

measure of historical perspective for

the Court. When the railroad and

highway builders moving across the

country attempted to devalue the mining

claimant's work and worth, they were

stopped in the courts by the mining law

because the courts and due process were

still available to the mining

claimant?>, Years of administrative

procedure and expense did not intervene,

and the uncertainty of the value of

mining land did not deprive it of the

possessory title to monetary worth and

protection. 2%

In determining which procedural

safeguards must be afforded Petitioner,

the Court must consider the extent to

25. Zeigler v. South & North Ala. R.R. Co., 58 Ala. 594,

26. Montana R + Co. v. Warren, 137 U.S. 348, 352-53

(1890). See also J. Adams & Barringer, The Law of

Mines and Mining in the United States, 188 (1877).

-39-

which Mendenhall might suffer grievous

loss, the nature of the government

function involved, and the nature of the

private interest affected - the criteria

formulated in Morrissey v. Brewer.2!

In Best v. Humboldt, supra, and in

Wilbur v. United States ex rel.

Krushnic, the Supreme Court has held

that unpatented mining claims are

possessory mineral interest in land, as

well as "property in the fullest sense

of that term."28 Similarly, the Ninth

Circuit Court of Appeals recently

concluded that the holder of an

unpatented mining claim has a property

right:

(b)ecause an unpatented mining claim

is a unique form of property which

created in the owners a possessory

27. Morrissey v. Brewer, 408 U.S. 471, 481-82 (1972).

28. Wilbur v. United States ex rel. Krushnic, 280 U.S.

306, 317 (1930).

-40-

interest in the land, the loss of

such an interest wou} constitute a

substantial injury."

The extent of the loss to Petitioner is

"property" by Supreme Court interpreta-

tion and thereby it is entitled under

the Fifth Amendment of the U.S. Consti-

tution to Gue process before Respondent

can take it.

Morrissey v. Brewer, supra,

instructs the courts to examine the

nature of the governmental funetion

involved in the taking of the

property. In Best v. Humboldt, supra,

the function of the government was to

examine title prior to condemnation for

adam and reservoir. In U.S. v.

Sullivan the government function is not

29. Western wun Council v. wey 643 F.2d 618, 628

. a n D. e v. Watt, U.S. Dist.

Ct., Nevada, C - 9 October

21, 1983, cert. S8.Ct., October, 1984.

-41-

clear. The area of the Charleston

claims was once part of a "small tract"

classification by the Bureau of Land

Management which could have resulted in

the land's becoming valuable as real

estate; but the area was removed from

that classification because it is

extremely susceptible to flash fooding

and remains chiefly valuable for its

mineral deposit.

The idea that development of

certain deposits of mineral would be

allowed only on public lands for which

that mineral was the chief value came

into the mining law by the Building

Stone Act of 1892 (30 U.S.C. Section

161). The Common Varieties Act made no

such limitation, the Common Varieties

Act was to remove no valuable deposit of

mineral located as of July 23, 1955,

from the functioning of the general

mining law.

-42-

Respondent's function in U.S. v.

Sullivan was not to rid the land of

mining claims so that the land might be

used for another purpose without cost,

as in Best v. Humboldt, supra, nor to

determine the chief value of the land.

The land of Petitioner's mining claims

remains open to mineral entry today; so

the Petitioner has located new mining

claims over his discovery on the

Charleston 24/39 and has made

application for patent. He follows the

advise of the Court in Best v.

Humboldt: "A locator who does not carry

his claim to patent does not lose his

mineral claim, although he does take the

risk that his claim will no longer

support the issuance of a patent."

In Best v. Humboldt, the Supreme

Court elaborated on the property right

of an unpatented mining claimant:

-43-

The claims are... valid against

the United States if there has been

a discovery of mineral within the

limits of the claim, if the lands

are still mineral and if other

statyfory requirements have been

met.

Despite the fact of a valuable

discovery of mineral and the fact that

Petitioner has met all statutory

requirements, if the Court allows U.S.

v.. Sullivan to escape judicial review of

the facts, Petitioner fully expects to

be compelled by Respondent to carry

his mining claims through admin-

istrative procedure and into the courts

once again. The Respondent will

undoubtedly interpret the invalidation

in U.S. v. Sullivan as res adjudicata on

the issue of whether Petitioner's

deposit is a common variety of mineral,

30. 30 USC 21,22,26; General Mining Regulation of the

Bureau of Land Mgt, 43 CFR §§ 185.1-185.3. See

also: U.S. vs. Deasey, 24 F.108 (D. Idaho 1928).

-44-

which cannot be located after July 23,

1955, or a mineral with special and

distinct value, exempt from the Conmon

Varieties Act. The fact that Sullivan's

claims and the discovery of the valuable

mineral deposit were prior to July 23,

1955, will be virtually lost to

Sullivan's predecessor in interest,

Petitioner Robert Mendenhall. Absent a

function for the invalidation of

Sullivan's claims, if this Court

confirms U.S. v. Sullivan, Respondent

will have succeeded in making a mockery

of the mining laws and of entrymen

rights to due process of law with

relation to mineral exploration and

development on the public lands.

Finally, Morrissey, supra,

recommends that due process be

safeguarded by a factual review of the

findings in administrative tribunals

where required by the nature of the

-45-

private interest affected. Without due

process protection for mining claims,

investors in the mineral industry are

without any security for their invest-

ment in what is otherwise such a high-

risk that the nation's mineral industry

is being seriously curtailed.

Respondent, in its opposition to the

mining laws, which it has been sworn to

uphold, has become another enemy in a

business frought with enemies - weather,

difficult terrain, vandals, uncertainty

of sufficent quantity and quality,

cyclical mineral prices and varying

costs of labor and materials. The

Courts have recognized the hazards in

their interpretation of the law, U.S. v.

Rizzinelli, supra, and the testimony of

Sullivan in U.S. v. Sullivan confirms

that the Charleston 24/39 claims were

not free from any of these hazards.

-46-

Furthermore, respect for local

custom and state law is one of the

important components of the federal

mining laws. Even the amount of acreage

allowed within a mining claim was left

to the discretion of the local mining

district in the 1866 federal mining

laws; and the 1872 laws left the width

of a lode claim to matters of individual

terrain and to the custom by which

miners had marked the particular

countryside and mineral deposits. In

the western states, such as Nevada, the

mining industry has been at the crux of

economic development and in recognition

of that fact, Nevada state law has long

provided eminent domain rights to

mining. °!

31. Laws of Nevada, Seventh Session, Chapter LVI, "An

Act to encourage the mining, milling, smelting, or

other reduction of ores in the state of Nevada,"

approved March 1, 1875.

-47-

ate

—“ -

cae ee a ee FAs ee LU eS ee

-

Refusal by the Courts below to

rehear the facts in U.S. v. Sullivan

will result in property loss to

Petitioner, will serve no constructive

function of the Interior Department, and

will adversely affect the mineral

industry at large. Therefore,

“Petitioner's rights to due process have

been violated and evidentiary questions

otherwise left to agency discretion must

be decided in a factual hearing by the

Courts. 22

32. U.S. vs. Noguiera, 403 F.2d 816 (9th Cir. 1968).

-48-

~—-—

Conclusion

For these reasons, a writ of

2rtiorari should issue to review the

idgement and opiniom of the Ninth

ircuit.

2sspectfully submitted,

Hate © Togunn

ile C. Tognoni

10 West Clarendon, Suite 1260

loenix, AZ 85013

osunsel for Petitioner

t

~~ BEST AVAILABLE COPY

APPENDIX

i)

ii)

APPENDIX

TABLE OF CONTENTS

ORDER EXTENDING TIME TO FILE PETI-

TION FOR WRIT OF CERTIORARI..........1

ORDER FURTHER EXTENDING TIME TO FILE

PETITION FOR WRIT OF CERTIORARI...... 2

DECISIONS, OPINIONS AND MEMORAN-

DUMS RENDERED BY COURTS OR ADMINI-

STRATIVE AGENCIES IN THE CASE

Decision of the Hearing Examiner in

United States v. Frank R. Sullivan,

N@VGAGG NO. DGSTSS.ccrccccccccccccccce 3

Decision of the Hearing United

States Department of Interior Board

of Land Appeal, United States v.

Sullivan, I.B.L.A. 72-273, 9

beBebecAe 378.0 cece Terrie TeTTTTT TT 26

December 30, 1982, Decision and

Order of District Judge Edward C.

Reed in Robert L. Mendenhall v.

United States, 1982 CV-R-80-146-

ECR, Nevada, (Reno)......... Terre re 32

Decisions in Companion Cases

Charlestone Stone Products Co.,

Ine. v. Cecil D. Andrus, No.

75-1532, Ninth Circuit Court of

Appeals, May 12, LOTT. cccccecccseese 59

Everett Foster v. Fred A. Seaton,

Secretary of the Interior, No.

14953, District of Columbia Court

of Appeals, October 22, 1959........ 92

——e

(iii) JUDGEMENT SOUGHT TO BE REVISED AND

(iv)

ORDER ON REHEARING...... eocccccces 101

OTHER

Exhibit 4 - United States District

Court, Nevada Civil No. R-80-146-

ECR, Affidavit of George A.

Kiersch, Geologist and Engineer...107

Exhibit 10 - United States

District Court, Nevada Civil No.

R-80-146-ECR, Affidavit of

Robert L. Mendenhall, Petitioner..119

Supreme Court of the United States

No. A-194

ROBERT L. MENDENHALL,

Petitioner,

V.

UNITED STATES

ORDER EXTENDING TIME TO FILE PETITION FOR

WRIT OF CERTIORARI

Upon Consideration fo the application

of counsel for petitioner(s),

It Is Ordered that the time for filing

a petition for writ of certiorari in the

above-entitled cause be, and the same is

hereby, extended to and including October

26, 1984.

/s/ William H. Rehnquist

Associate Justice of the Supreme

Court of the United States

Dated this 18th

day of September, 1984

oje

Supreme Court of the United States

No. A-194

ROBERT L. MENDENHALL,

Petitioner,

Vv.

UNITED STATES

ORDER FURTHER EXTENDING TIME TO FILE

PETITION FOR WRIT OF CERTIORARI

Upon Consideration fo the application

of counsel for petitioner(s),

It Is Ordered that the time for filing

a petition for writ of certiorari in the

above-entitled cause be, and the same is

hereby, extended further to ane including

November 5, 1984.

/s/ William H. Rehnquist

Associate Justice of the Supreme

Court of the United States

Dated this 23th

day of October, 1984

UNITED STATES DEPARTMENT OF THE INTERIOR

OFFICE OF HEARINGS AND APPEALS

HEARINGS DIVISION

Room W-2426, 2800 Cottage Way

Sacramento, California 95825

December 28, 1971

DECISION

United States of

America,

Contestant

Frank R. Sullivan,

Contestee

Contest No. N-065732,

065733, Involving

Charleston No. 24 aka

Charleston No. 39 and

Extension 39 of the

Charleston; and Char-

leston Spur No. l

placer mining claims,

located in Secs. 34,

35, and 36, T. 19 S.,

R. 59 E., and Sec. 3,

T. 30 &., BR. $8 &.,

M.D.M., Clark County,

Nevada

MINING ‘“‘LAIMS DECLARED NULL AND VOID

The manager of the Nevada Land Office ini-

tiated these contests by filing a complaint

which asserts as to Charleston No. 24

placer mining claim (also known as

Charleston No. 39 and referred to in this

decision as Charleston 24/39), and the

Charleston Spur No.

1 placer mining claim:

1. That valuable minerals have not been

found within the limits of the

claims so as to constitute a valid

discovery within the meaning of the

mining laws.

2. That no discovery of a valuable

mineral has been made within the

limits of the claims because the

mineral materials present cannot be

marketed at a profit and/or could

not be marketed at a profit prior to

the Act of July 23, 1955.

The contestee's answer denies the allega-

tions of the complaint relating to lack of

discovery of valuable minerals, and con-

tends that "valuable minerals (namely;

sand, gravel and/or rock) have been found

within the limits of the claims and have

been marketed at a profit both prior and

subsequent to the Act of July 23, 1955."

A hearing in this proceeding was held in

Las Vegas, Nevada on February 18, 1971. In

a brief filed subsequent to the hearing the

contestee advised that he concurs with the

following paragraphs of the "Summary of the

Evidence," included in the post-hearing

Sie does ial . as) TAREE ORIOLES LE ANWAR OE GF IN IMP NO OI LT SPM OTE TNE LE OPE A RE NRL! ENE AT OY SOO ON ONY

brief filed on behalf of the Bureau of Land

Management:

l.

The only mineral material on the two

contested claims is the sand and

gravel.

The usable sand and gravel material

on the two contested claims is suit-

able for all general construction

purposes.

Subject to the usual minor differ-

ences, the sand and gravel material

on the two contested claims is simi-

lar to and is useable for the same

general construction and building

purposes as other sand and gravel

deposits in the Las Vegas area.

The sand and gravel materials on the

two contested claims constitute

"common varieties of sand and

gravel" within the purview of

Section 3 of the Act of July 23,

S9SG. + © © »

The entire area of the Charleston

No. 24/39 claim contains good qua-

lity commercial sand and gravel.

The five statements listed above are also

Supported by the evidence in the case

record.

Mr. Thomas E. Schessler, a mining engineer,

testified at the hearing on behalf of the

Bureau of Land Management. The only other

witness was the contestee, Mr. Frank R.

Sullivan.

Review of Evidence; Findings

Mr. Schessler has a degree in geology and

at the time of the hearing had worked for

the U.S. Geological Survey, private mining

companies, the U.S. Forest Service, and the

Bureau of Land Management for a total of

approximately 19 years. Tr. 2-3. In his

work as a mining engineer he had examined

"around a hundred" sand and gravel claims

or deposits located in nine states other

than Nevada, and between twenty and thirty

claims in the Las Vegas Valley. In his

research on the claims in question he

learned that they had been located in late

February 1955 by Mr. E. H. Brawner. The

contestee acquired them in 1958 or 1959 as

a part of a group of more than 20

"Charleston" claims.

The two contested claims are approximately

eleven miles by air or twelve miles by road

northwest of Las Vegas. Tr. 10.

Mr. Schessler examined them on January 22,

1971 and February 11, 1971. Tr. 9.

Because he did not come to the Las Vegas

area to work until 1967 his knowledge of

the history of the claims, and activity on

them during previous years was gained from

a review of documents, including Bureau

files, aerial photographs, and records of

market sales of sand and gravel.

In 1971 Mr. Schessler found two bulldozer

cuts on the east end of Charleston 24/39,

with piles of sand and gravel material

nearby. His impression was that none of

the excavated material had been removed

from the claim. In addition, there are

four or five older bulldozer cuts on the

western end of that claim. Tr. 11-12. The

excavated material in that area "seemed all

to have been in place." Tr. 12.

No pits or improvements were found on

Charleston Spur No. 1. Exh. 2; Tr. 12.

Most of that claim is bedrock outcrop.

However, there is "probably not more than

three acres" of alluvial type sand and

gravel in a draw which crosses the lower

part of the claim, and extends for a short

distance into the upper portion. Exh. 3;

TRe 3.

From his investigation and observations,

Mr. Sechessler concluded that there had been

no removal or marketing of materials from

either of the claims. Tr. 15. He indi-

cated, however, that it would be hard to

determine whether or not there had been

removal of material from a draw in the

western end of Charleston 24/29. Tr. 17-

18. In recent years Mr. Sullivan has con-

structed a road which provides access to

Charleston 24/39 from the east. Tr. 17.

Until that was done only the western end of

Charleston 24/39 and the southeastern por-

tion of Charleston Spur No. 1 could be

reached by road. He pointed out that a

1965 aerial photograph (Exhibit 3) shows no

road coming into Charleston 24/39 from the

east, and no bulldozer cuts on the eastern

end.

The Bureau's expert was unable to estimate

the depth of the sand and gravel contained

in the three acre portion of Charleston

Spur No. 1. He found “essentially no sand

and gravel" on the upper portion of that

claim. He observed the sand and gravel

deposit on Charleston 24/39 to a depth of

20 feet, and conceded that it could extend

to a depth of 500 or 600 feet - - that

claim could easily contain a million cubic

yards. Tr. 18, 24, 49.

Mr. Schessler testified that any marketing

of sand and gravel from the claims "could

not have been in large quantities."

-9-

Tr. 19. He described the locations of

competing sand and gravel firms in the Las

Vegas Valley, and pointed out that they

were between two and five miles closer to

the center of Las Vegas than the Charleston

claims. In his view this placed the latter

claims at a competitive disadvantage.

Taking into account the growth of Las

Vegas, he stated that prior to July 23,

1955 the "competitive problem of haulage

distance was probably more. .. than it is

today." Tr. 21. As a result of his inves-

tigation he concluded that material from

the two claims under consideration could

not have been marketed at a profit as of

July 23, 1955, and that there was no market

demonstrated for those claims.

On cross examination Mr. Schessler conceded

that at the time of the hearing there was a

total market for sand and gravel in excess

of 3,000,000 tons per year. He

-18-

we

acknowledged that in his 1971 inspections

he found signs of removal from the 11 and

13A components of Charleston 24/39

(depicted on Exhibit 2), observing that the

"evidence is slim that it was in any large

quantity." Tr. 27. He insisted that there

is nothing on the 1965 aerial photograph

(Exhibit 3) to indicate "any substantial

removal." Tr. 29, 31. He agreed that very

heavy rainfall and a resulting flood could

have obliterated excavations in the

draws. Tr. 32.

The contestee in his testimony explained

that he acquired all of the Charleston

claims "on a foreclosure." Tr. 38. He

transferred the Charleston 1 through

Charleston 22 claims. to Charleston Stone

Products, but retained his interest in

Charleston 24/39 and Charleston Spur

_No. 1. His statements relating to removal

of sand and gravel were couched in very

si k-

general terms. Excavated pits from which

materials were removed and which are ob-

servable on Exhibit 3 are located outside

of the boundaries of the two claims in-

volved in this contest (they may encroach

to a minor extent on Charleston 24/39).

Tr. 41. Mr. Sullivan stated that he "sold

an awful lot of gravel" from a wash in the

western (11 and 13A) segments of Charleston

24/39. This was in 1957 or later. Tr. 36-

38. He described the removals as follows:

"At that time I didn't have big

equipment. I did have small

loaders, so I had to take what was

loose and available, and close to

the road. The road went right by

it, and every time a flood would

come down. . . it would come right

back in and fill it and I would go

right back and dig it up." Tr. 43.

Two of the sand and gravel stockpiles which

are "off the western boundary of Charleston

24/39 claim" were placed by Mr. Sullivan

when he owned all of the Charlestcn

claims. Tr. 44.

«1 9~

At the hearing the contestee produced no

evidence to establish that sand and gravel

had been removed and marketed from

Charleston 24/39 and Charleston Spur No. 1

prior to July 23, 1955. Four unsworn

statements are attached to the Contestee's

Brief, filed on July 9, 1971. One states

that Wheeler Freightways "hauled gravei for

Mr. E. J. Braner (sic) prior to 1955 on

several occasions to areas in the Valley

and different business concerns." The

second unsworn statement is from a con-

struction company superintendent, 48nd con-

cerns a purchase of rock and gravel "in

1957-8."

The other two unsworn statements share the

basic deficiency of the two which have been

described, being mere attachments to a

brief filed after the hearing. However,

they are the only ones which both (i) men-

tion a time prior to July 23, 1955, and

o13-

(ii) refer to material hauled from the two

claims which are the subject of this con-

test. One, from an employee or former

employee of the North Las Vegas Street

Department, advises that the signer of the

statement "in 1954, 1955, 1956. .. did

haul gravel from pits located in the

Charleston Placer No. 24 and the Charleston

Spur Placer Mining Claim. ..." No

details as to amounts paid for the gravel,

if any, or as to quantities are provided.

Also the statement does not furnish spe-

eifie information on what happened during

the five months which elapsed between the

location of the claims and July 23, 1955.

The last statement, from Mrs. Hilda Pine,

refers to her husband as the "original

discoverer," and asserts that "gravel was

sold as a business venture from Mining

Claim known as Charleston Spur No. 1, and

Charleston No. 24, and Charleston

alga

-

3

Fe

No. 39." Mrs. Pine's statement discusses

receipt of "monies in payment for the gra-

vel which was sold from our mining claims,"

her inspection of "claims to see that

things were as they were ordered by my

husband," and receipt of monies each year

for gravel payments [d]uring the years that

Mr. Brawner was staying with me and

Mr. Pine, prior to 1955" (emphasis sup-

plied). Mr. Pine was one of the locators

of the Charleston Nos. 1 through 22 placer

claims (see p. 2 of Hearing Examiner's

October 30, 1970, decision in Contest

Nos. N-065729-A-Q and N-065731-A-B in which

Charleston Stone Products, Ine., is the

contestee), but exhibits 4, 4A, 5 and 5A in

this (the Sullivan) contest show that he

was not a locator of Charleston 24/39 or

Charleston Spur. No. 1. This fact, plus

Mrs. Pine's reference to receipt of monies

prior to 1955, indicate that she is con-

fused as to claim boundaries and names.

=18-

Considered in its entirety, her statement

is far more consistent with removals from

one or more of the claims which had been

located in 1942 by Mrs. Pine's husband and

A.M. Murphy (Charleston Nos. 1-22) than it

is with the asserted sales from Charleston

Spur No. 1 and Charleston 24/39. It is

noted that the Hearing Examiner's decision

which is cited in this paragraph found that

"Mr. Brawner was operating from Claim 10

and was utilizing material from Claim 9 in

1955 at the rate of approximately 5000

yards a year," and that within Claim 9 and

Claim 10 "there is in excess of 1,000,000

yerds of usable material."

Charleston Stone Products, Ine., contends

that it is the owner of the 11 and 13A

portions of Mr. Sullivan's Charleston 24/39

claims (see Exhibit 2). Therefore, the

testimony of a "number of witnesses" in the

Charleston Stone Products (the subject of

-16-

>

on

the above-titled Hearing Examiner's deci-

sion), describing "the Brawner operation on

the claims between 1954 and 1958" is of

some interest. The findings in that deci-

sion would seem to be at least as reliable

as the allegations in the unsworn state-

ments attached to the contestee's brief.

The Hearing Examiner found:

"There was no active operation on

any of the remaining claims on

July 23, 1955, [the reference is to

all claims involved other than

Charleston Nos. 9 and 10, and

includes the overlapping 11 and 13A

portions of Charleston 24/39] and

the occasional utilization of

material from these claims prior to

and after that date was not con-

nected with the Brawner operation.

Also there was no probative evidence

that the deposit on any of these

latter claims could have been oper-

ated profitably in competition with

the many other potential deposits in

the Las Vegas Valley on the critical

date . « « o®

Conclusions and Decision

Upon the establishment of a prima facie

case by the Government, the burden shifts

to the mining claimant to show by a

ofa

prepoderance of evidence that a discovery

of valuable minerals has been made. United

States v. Patee et al. A-28731 (May 7,

1962).

A recent decision, United States v. Clear

Gravel Enterprises, Ine. IBLA 70-15 (May 2,

1971), summarizes the legal principles

which govern this proceeding as follows:

"The basic principles of law. . .

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

[W] here minerals have been

found and the evidence 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 suc-

cess in developing a valu-

able 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

«}g-

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 facts as the

accessibility of the deposit, bona

fides in development, 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

in the Las Vegas area. Palmer v.

Dredge Corporation [398 F. 2d 791

(9th Cir. 1968), cert. den., 393

U.S. 1066 (1969)]; Foster v. Seaton,

271 F.2d 836 (D.C. Cir. 1969);

Osborne v. Hammit, Civil No. 414 (D.

Nev., August 19, 1964).

"Furthermore, since Congress with-

drew common varieties of sand and

gravel from location under the

mining laws on July 23, 1955 (30

U.S.C. §611 (1964), it is incumbent

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 materials

could have been extracted, removed

and marketed at a profit, had been

met by that date. Palmer v. Dredge

Corporation [cited above] ; United

States v. Barrows, 404 F.2d 749 (9th

Cir. 1958), cert. den., 394 U.S. 974

(1969).

The Clear Gravel Enterprises decision also

holds that to satisfy the marketability

~}9-

test for minerals of widespread occurrence,

it is not enough to show that there is a

general demand for the type of material in

question -- it must be shown that the

mineral from the particular deposit could

have been extracted, sold and marketed at a

profit. The decision also quotes exten-

sively from Osborne v. Hanmit, supra. A

portion of the quoted material from the

latter decision is as follows:

"the record discloses a situation

where, if the Bradford Claims could

be sustained on the hypothetical and

speculative opinion evidence relied

upon by the plaintiffs, each of the

claims in the valley comprising over

100,000 acres might be separately

validated on the same sort of theo-

retical evidence. The end result

would be that 100,000 acres of

public land would have been patented

as valuable for mining, where it is

evident and shown by the record that

not more than one percent of the

material might have been marketable

in the reasonably forseeable

future."

The Court observed also that the plaintiffs

had "failed to enter the race" to supply

the theoretical insufficiency of sand and

-20-

gravel, and that if they had done so they

would have demonstrated present demand and

given an indication that they intended to

develop the claims in good faith.

Mr. Schessler's testimony and Exhibit 3,

the aerial photograph, establish a prima

facie case that there was no production or

sale of sand or gravel from Charleston

24/39 and Charleston Spur No. 1 on or prior

to July 23, 1955. The excavated pits on

Charleston Nos. 9 and 10 are corrobative of

the Hearing Examiner's finding (in the

October 30, 1970 decision relating to the

Charleston claims which Mr. Sullivan did

not retain) that Mr. Brawner's sand and

gravel operation and utilization of mater-

ials during 1955 and prior years involved

Charleston Nos. 9 and 10, not the two which

are the subject of this contest (located by

Brawner in late February, 1955).

Mr. Brawner had 27 Charleston claims

-2l-

-.

available at that time, but was disposing

of relatively minor quantities of sand and

gravel. The case record provides no sup-

port for an assumption that he moved from

the Charleston Nos. 9 and 10 claims to

either Charleston 24/39 or Charleston Spur

24/39 at any time during, or prior to,

1955.

The contestee's brief asserts that in the

event marketing from the contested claims

did not occur prior to July 23, 1955, the

criteria is “could have been marketed" at a

profit prior to that date. Then, noting

the contestee's testimony that he marketed

materials from the two claims at a profit

in years subsequent to 1955, the brief

argues that this is an indication "that the

materials were within the province of the

definition of marketable material." But

this leads one directly to an inquiry as to

why sand and gravel from Charleston 24/39

-22-

*

and Charleston Spur No. 1 would have been

utilized to satisfy a limited demand in

preference to sand and gravel from the

other Charleston claims. The demand was

limited due to the existence of established

sand and gravel operations which were

closer to the City of Las Vegas. The few

thousand yards of material sold annually by

Mr. Brawner in those years satisfied the

demand, and cannot be spread around to

validate all of the Charleston claims.

This contest provides an example of a fail-

ure "to enter the race" as mentioned in

Osborne v. Hammit, supra.

A mining claimant does not meet his burden

of proof, once the Government has presented

a prima facie case, by presenting only

infirm or inconsistent recollection rather

than adequate records or other reliable

means of proof. Accord, United States v.

E.A. Barrows and Esther Barrows, A-31023

-23-

(November 28, 1969). The contestee has

failed to show by the preponderance of the

evidence (i) that any quantity of sand and

gravel actually was marketed from the con-

tested claims prior to July 23, 1955, or

(ii) that under known marketing conditions,

there was an outlet for profitable disposal

of a substantial quantity of sand and

gravel from the two contested claims prior

to July 23, 1955. Therefore, the Bureau

has sustained the charge that no discovery

of a valuable mineral has been made within

the limits of the claims because the

mineral materials present could not be

marketed at a profit prior to the Act of

July 23, 1955. In view of this holding

there appears to be no necessity for

rulings on the other charges contained in

the complaint. The Charleston 24/39 and

Charleston Spur No. 1 placer mining claims

are hereby declared null and void.

-24-

An appeal from this decision may be taken

to the Board of Land Appeal, in accordance

with the regulations of 43 CFR Part 4,

published in 36 F.R. 7185-7208, April 15,

1971 (Subpart E contains special rules

applicable to publie land appeals). If an

appeal is taken the notice of appeal must

be filed in this office (not with the

Board) in order to facilitate transmittal

of the case file to the Board. If the

procedures set forth in the regulations are

not followed, an appeal is subject to

dismissal.

Dean F. Ratzman

Hearing Examiner

Distribution:

Otto Aho, Field Solicitor, U.S. Department

of the Interior, Room 2004, Federal

Building, 300 Booth Street, Reno, Nevada

89502 (Cert.)

Robert J. McNutt, Agent for Contestee,

5636 West Charleston Boulevard,

Las Vegas, Nevada 89101 (Cert.)

Frank Sullivan

Box 3186 Las Vegas, Nevada 89114 (Cert.)

Standard Distribution

Enclosure: Regulations relating to appeals

procedures

=-%$-

United States Department of the Interior

OFFICE OF HEARINGS AND APPEALS

INTERIOR BOARD OF LAND APPEALS

4015 Wilson Boulevard

Arlington, Virginia 22203

UNITED STATES

V.

FRANK R. SULLIVAN

IBLA 72-273 Decided February 6, 1973

Appeal from a decision by Administra-

tive Law Judgel Dean F. Ratzman declaring

mining claims null and void. (Contest Nos.

N-065732 and N-065733.

Affirmed.

Administrative Procedure: Hearings--Consti-

tutional Law

In an administrative proceeding to

determine the validity of a mining

claim, there is no denial of due

process for lack of representation

by a member of the bar. Due process

l. The change of title of the hearing officer from

"Hearing Examiner" to "Administrative Law Judge" was

effectuated pursuant to order of the Civil Service

Commission, 37 F.R. 16787 (August 19, 1972).

-26-

in such cases envisages notice and

an opportunity for a hearing.

APPEARANCES: Keith C. Hayes, Esq., of Las

Vegas, Nevada, for the appellant; Otto Aho,

Esq., Field So:icitor, United States

Department of the Interior, Reno, Nevada,

for the appellee.

OPINION BY MR. FISHMAN

Frank R. Sullivan has appealed to the

Board of Land Appeals from a decision by an

Administrative Law Judge dated December 28,

1971, which declared appellant's mining

claims to be null and void.

The mining claims in issue were the

Charleston No. 24 (also known as the

Charleston No. 39 and Extention 39 of the

Charleston) and the Charleston Spur No. 1.

The claims are situated approximately i2

miles from Las Vegas, Nevada and were

located for sand and gravel in February of

1955.

=97~

Appellant does not challenge the find-

ings of fact or conclusion of law reached

by the Judge. Instead, counsel for appel-

lant argues that principles of due process

require the decision of December 28, 1971,

to be set aside and appellant to be given

another opportunity to present his case.

In support of this position, counsel for

appellant states that appellant was repre-

sented by Robert J. McNutt at the hearing,

that McNutt was not a lawyer, and that

neither the appellant nor McNutt was aware

of appellant's burden or proof at the hear-

ing.

In United States v. Charles D. and

Jeanne D. Haas, A-30654 (February 16,

1967), the appellants therein, whose mining

claim was declared invalid, similarly

argued on appeal that due process required

their case to be remanded for a new hear-

ing. The Department stated:

-28-

The appellants contend that it was

an "abuse" of due process to allow

them to present their case without

aid of legal counsel. They suggest

generaliy that their case could have

been presented at the hearing in a

more effective manner had they had

benefit of legal counsel. This may

be true. However, there was nothing

that prevented the appellants from

being represented by proper legal

counsel. Department regulations

permit a party to be represented at

a hearing by proper legal counsel

(see 43 CFR Part 1 [now codified as

43 CFR 1.3] and 43 CFR 1850-0-

6(3)(4)), but there is nothing to

require such representation.

In an administrative proceeding to

determine the validity of a mining

claim, there is no denial of due

-29-

process for lack of representation

by proper legal counsel. Due

process in such case implies notice

and a hearing. Orchard v.

Alexander, 157 U.S. 372, 383 (1895);

Cameron v. United States, 252 U.S.

450, 460 (1920); Best v. Humoboldt

Placer Mining Co., 371 U.S. 334, 338

(1963). * * ®

For similar results, see United States v.

Raymond Bass, Betty Yeck, et. al., 6 IBLA

113, 117 (1972) and United States v.

William A. McCall and R.J. Kaltenborn, 1

IBLA 115, 121, (1970).

In the case at bar, appellant was

properly notified of the contest proceed-

ings which were initiated to challenge the

validity of his mining claims. Appellant

was also afforded a fair hearing. It was

he who chose not to engage the services of

a lawyer at the time of the hearing when

-30-

his rights were at stake. He may not now

be heard to complain.

Therefore, pursuant to the authority

delegated to the Board of Land Appeals by

the Secretary of the Interior, 43 CFR 4.1,

the decision appealed from is affirmed.

Frederick Fishman,

Member

We concur:

Newton Frishberg,

Chairman

Edward W. Stuebing,

Member

Mr. Schessler said that he had per-

sonally inspected the two claims on

January 22, 1971, and February 11, 1971. A

geologist from his office had accompanied

him on the first inspection trip; Mr.

Schessler had been alone during the second

trip. He testified that he had driven onto

the claims in a four-wheei drive vehicle.

In particular, he had been looking for

"improvements." He had found the two major

bulldozer cuts. However, he reported that

all of the materials that had been exca-

vated seemed to be piled up near the

cuts. Little or none appeared to have been

removed.

The gravel ceposits on the claims were

described by Mr. Schessler as partly bank

gravel, and the remainder as stream

gravel. He said they were similar to other

limestone-dolomite deposits in the Las

Vegas Valley. The witness reiterated that

neither his aerial photograph study nor his

-38-

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

ROBERT L. MENDENHALL,

Plaintiff, CV-R-80-146-ECR

vs. MEMORANDUM DECISION

THE UNITED STATES OF AND ORDER

AMERICA, THE UNITED

STATES DEPARTMENT OF

INTERIOR, an

CECIL D. ANDRUS,

Secretary of the

Interior and EDWARD F.

SPANG, State Director

of Nevada Bureau of

Land Management,

Defendants.

/

This matter has come before the Court

by reason of the plaintiff's objections to

the report and recommendation of U.S.

Magistrate Phyllis H. Atkins, which was

filed March 31, 1982. The report and

recommendation was made after considering

the plaintiff's motion to set aside agency

action and the motion to dismiss of defen-

dant United States of America.

-33-

This Court has made a de novo deter-

mination as to the portions of the

Magistrate's report and recommendation that

the plaintiff has objected to. The entire

record before the Magistrate has been

studied, oral argument was heard on

August 9, 1982, and additional evidence and

legal briefs submitted post-hearing by

leave of Court have been examined.

In February of 1955, predecessors in

interest of the plaintiff located two

placer claims (often referred to as

Charleston 24/39 and Charleston Spur No. 1)

in Clark County, Nevada. Notices of loca-

tion were duly recorded in the Office of

the County Recorder. The claims covered

deposits of sand and gravel.

Congress subsequently enacted 30

U.S.C. §611, which declared that common

varieties of sand and gravel would not be

deemed valuable minerals after July 23,

1955, so that they could not serve as the

-33-

basis for any mining claim located subse-

quent to that date.

Possession of the two subject claims

was obtained through foreclosure by Mr.

Frank R. Sullivan, in 1959. The United

States filed a complaint, in November 1965,

contesting the validity of mining claims.

Essentially, the Governmert contended that

no valuable minerals were found within the

claims because the sand and gravel had not

been and could not be marketed profitably

on or before July 23, 1955.

Acting pursuant to a power-of-

attorney, civil engineer Robert J. McNutt

answered the complaint for Mr. Sullivan.

The Nevada land office of the U.S. Bureau

of Land Management, Department of Interior,

declared the claims null and void. One of

the reasons given was that Mr. McNutt had

not qualified, as a non-lawyer, to practice

before the Department of Interior. Mr.

McNutt filed an appeal of the decision on

=%4-

behalf of Mr. Sullivan. The Department, by

letter dated May 22, 1967, advised Mr.

Sullivan that the appeal was subject to

dismissal because his agent and attorney-

in-fact, Mr. McNutt, still had not shown

himself qualified to practice before the

Department. The letter even stated: "From

the nature of the showing which he has

attempted to make, it is obvious that Mr.

MeNutt is not qualified to practice before

the Department." Nevertheless, it went on

to advise: "However, the Department has

adopted the practice of accepting appeals

filed by an attorney-in-fact when his

action has been ratified by the appellant."

Mr. Sullivan executed a formal ratifi-

cation form before a notary public, in

which he ratified and adopted the documents

which had been filed on his behalf by

Mr. McNutt. They had been entitled "Answer

to Complaint", "Additional Showing as

Required", "Notice of Appeal" and

-$§-

"Appeal". The letter accompanying the

ratification form gave Mr. Sullivan's

return address as "Albright & Heaton,

Attorneys at Law, 300 Title Insurance &

Trust Building, 309 South Third Street, Las

Vegas, Nevada 89101." The Department

thereupon remanded the case to Hearing

Officer (later renamed Administrative Law

Judge) Dean F. Ratzman. He held a hearing

on February 18, 1971, at which Mr. McNutt

represented Mr. Sullivan. Mr. Sullivan

testified on his own behalf. He already

had seen the Government's proposed exhi-

bits, and told Mr. Ratzman that they didn't

reflect about $15,000 wneth or work he

(Sullivan) had done on the claims, nor did

they show" . . . what I have done in order

to market this gravel." The Hearing

Officers admitted the exhibits without

objection, with the understanding that Mr.

Sullivan could testify as to what he had

done to market the gravel, and he and Mr.

-36-

MeNutt could mark up the exhibits to illu-

strate other work that had been done, as

revealed by testimony.

The Government's witness before the

Hearing Officer was Thomas E. Schessler, a

mining engineer and lands and minerals

staff officer with the Las Vegas District

of the Bureau of Land Management. He tes-

tified that, during the four years he had

been stationed in Las Vegas, he had

inspected twenty to thirty sand and gravel

claims in the Las Vegas Valley. He aiso

had studied a United States Geological

Survey publication on Clark County and had

researched work done by predecessor mining

engineers in the Las Vegas office.

Further, he had examined a mosaic aerial

photograph of the area in which Mr.

Sullivan's two claims were situate. The

picture taking had occurred during an

April 15, 1965, flight.

-37-

iy

-

a

~ ) 7%,

Aah .. Fo “

7

LA) a

4 oe

aA at

>

A,

a

*

w ,

-

LA

oo

Ps :

ae ©

AD

—_

ae

ee

—

ground inspections revealed the removal of

any significant amounts of materials.

On cross-examination by Mr. McNutt,

Mr. Schessler acknowledged that he had been

in the Las Vegas area only since 1966. As

a result, his knowledge of sand and gravel

sales in the area had been derived from a

review of market sales. He conceded that

large quantities of sand and gravel had

been removed from land bordering Mr.

Sullivan's claims.

Mr. Sullivan then testified on his own

behalf. He said that he had had a rock

crusher on the claims until 1957. Proces-

sing of the materials extracted had been

done in North Las Vegas, where they had

been taken by truck. All of the materials

had been taken from a draw or wash, where |

they had been deposited during times of

flood. Mr. Sullivan reported that a major

flood had occurred in 1958. He believed

that the new materials depusited by that

-39-

flood could have covered all evidence of

the excavating work he had done previously.

Mr. Schessler then was called back to

the stand. He testified that character-

istic color patterns would show in an

aerial photograph of an area where an exca-

vation had been followed by new flood

deposits. Such color patterns are caused

by the new growths of vegetation on those

deposits. The aerial photograph of the two

claims did not exhibit the characteristic

color patterns that would support Mr.

Sullivan's belief, in the expert witness'

opinion. Nevertheless, he did not rule out

the possibility that a subsequent flood

could have obliterated Mr. Sullivan's exca-

vations in the draw.

Hearing Examiner Ratzman authorized

the filing of post-hearing briefs by both

sides. Attached to the brief filed on

behalf of Mr. Sullivan were four unsworn

statements from third parties re the haul-

-40-

as

ing of gravel from his two claims. Two of

the statements claimed that gravel had been

hauled prior to July 23, 1955.

Hearing Examiner Ratzman's written

decision was dated December 28, 1971. It

declared the two mining claims to be null

and void. He pointed out that the evidence

revealed that there were large quantities

of sand and gravel within the two claims;

Charleston 24/39 alone could easily contain

a million cubic yards. Further, he dis-

cussed in some detail the evidence as to

whether sand and gravel had been removed

and marketed from the claims prior to

July 23, 1955. This evidence included the

four aforementioned statements.

Mr. Ratzman's decision set forth the

prineiples by which he had judged the

case. First the Government had the burden

of establishing a prima facie case. Then

the burden shifted to the claimant, Mr.

Sullivan, to show by a preponderance of

o41<

2z-

evidence that a discovery of valuable

minerals had been made. This required

evidence demonstrating 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. Further, Mr.

Ratzman's decision acknowledged that the

"marketability test" had to be met. This

necessitated evidence "showing that mater-

ials could have been extracted, removed and

marketed at a profit" by July 23, 1955.

One way to make the showing would be for

the claimant to present evidence that he

had entered the race to supply the local

demand for sand and gravel. The Hearing

Officer found that the only significant

utilization of sand and gravel prior to

said date had been from nearby claims, but

not from the two claims here involved. He

stated that the limited demand for those

materials had been readily satisfied from

-42-

_—-- > ee

existing sand and gravel operations. The

decision summed up his reasons for finding

the two claims null and void as follows:

"The contestee has failed to show by the

preponderance of the evidence (i) that any

quantity of sand and gravel actually was

marketed from the contested claims prior to

July 23, 1955, or (ii) that under known

marketing Sone D5 pent, there was an outlet

for profitable disposal of a substantial

quantity of sand and gravel from the two

contested claims prior to July 23, 1955."

Mr. Suliivan retained attorney

Keith C. Hayes to appeal the decision of

Hearing Officer Ratzman. Mr. Hayes' pri-

mary contention was that due process

required the decision to be set aside and

that Mr. Sullivan be given another oppor-

tunity to present his case, in order that

additional evidence might be considered.

€

The reason given for this argument was the

representation of Mr. Sullivan by non-

-43-

lawyer Mr. McNutt before the Hearing

Examiner. Attorney Hayes argued that

neither Sullivan nor MeNutt had been aware

of the burden of proof imposed upon the

claimant at the time of the hearing.

The appeal was considered by a three-

man panel of the Interior Board of Land

Appeals (IBLA), which affirmed the Hearing

Officer's decision on February 6, 1973, in

an unanimous opinion. It pointed out that

Department of Interior regulations permit-

ted a claimant to be represented by a

lawyer, but did not require such represen-

tation. The opinion declares that in an

administrative proceeding to determine the

validity of a mining claim there is no

denial of due process because the claimant

is not represented by a lawyer; all that

due process implies is notice and a

hearing. The panel emphasized that Mr.

Sullivan chose not to engage the services

of a lawyer for the hearing, so that he

"may not now be heard to complain."

s'd~

The Bureau of Land Management duly

recorded a notice that the two mining

claims had been adjudicated null and

void. The recordation was made in the

official records of the Clark County

Recorder on February 26, 1973.

The plaintiff purchased the claims

from Mr. Sullivan on March 7, 1979. By

affidavit, he represents that he took an

option on the two claims from Mr. Sullivan,

who said that he owned them. Then, the

plaintiff declares in his affidavit, he

"went to the County Recorder and searched

the record for evidence that Sullivan owned

the Charleston claims, and found nothing

that would indicate that the claims were

not in good standing and then exercised my

option and went to producing aggregate

therefrom." Further evidence presented to

this Court by the Plaintiff establishes

that he has made a large investment in

Operating equipment on the claims and has

-45-

been producing vast amounts of sand and

gravei materials there.

The Plaintiff has several objections

to the Magistrate's report. First, he

disagrees with the Magistrate's holding

that he is limited, in this U.S. Distret

Court action, to the issue raised before

the IBLA; namely, the lack of due process

resulting from Mr. Sullivan's not having a

lawyer represent him before Hearing Officer

Ratzman. He further objects to the

Magistrate's conclusion that issues as to

the validity of the claims had been waived

by Sullivan's failure to raise them in his

appeal to the IBLA. In addition, he takes

issue with the Magistrate's conclusion that

the administrative record reflects no evi-

dence of any sales of or ability to sell

sand and gravel from the claims prior to

Mr. Sullivan's acquisition of them in

1959. The plaintiff objects in toto to

Magistrate Atkins' recommendation to this

-46-

Court. She recommends that the plaintiff's

motion to set aside agency action be

denied, and that defendant Uhited States'

motion to dismiss the action be granted.

Discussion:

This Court essentially is reviewing

the IBLA's affirmation of the Hearing

Officer's decision adverse to the plain-

tiff. The scope of this review is quite

limited. It consists of an examination to

determine whether the agency action was

arbitrary, capricious, an abuse of discre-

tion, unsupported by substantial evidence,

or not in accordance with the law.

Melluzzo v. Watt, 674 F.2d 819, 820 (9th

Cir. 1982). In doing so, this Court does

not reweigh the evidence or substitute its

judgment for that of the administrative

agency, Rawls v. United States, 566 F.2d

1373, 1376 (9th Cir. 1978); Baker v. United

States, 613 F.2d 224, 226 (9th Cir. 1980).

-47-

Substantial evidence is such relevant

evidence as a reasonable mind might accept

as adequate to support the agency's conclu-

sion. United States v. Smith Christian

Min. Enterprises, 537 F.Supp. 57, 62

(D.Ore. 1981). It is something less than

the weight of the evidence; the possibility

of reaching an opposite conclusion from the

evidence does not prevent the administra-

tive agency's holding from being supported

by substantial evidence. Ibid. The record

as a whole is looked at, Multiple Use, Inc.

v. Morton, 504 F.2d 448, 452 (9th Cir.

1974), rather than merely the evidence that

supports the agency decision. Charleston

Stone Products Co., Ine. v. Andrus, 553,

F.2d 1209, 1213 (9th Cir. 1977), rev'd on

oth. gds. 436 U.S. 604 (1978). The

claimant had to produce credible evidence,

for the agency was not required to give any

weight to testimony or other evidence which

it did not believe. Osborne v. Hammit, 377

F.Supp. 977, 985 (D.Nev. 1964).

-48-

The testimony of the Government's

expert, Mr. Schessler, constituted suffi-

cient substantial evidence to constitute a

prima facie case. He testified that he had

examined the claims and the sand and gravel

there could not have been mined and

marketed at a profit on or before July 23,

1955. His testimoney was not contradicted

by evidence that substantial amounts of the

materials had been mined or marketed prior

thereto. See McCall v. Andrus, 628 F.2d

1185, 1189 (9th Cir. 1980); see also

Russell v. Peterson, 498 F.Supp. 8, 9-10

(D.Ore. 1980).

If supported by substantial evidence

in the record, the agency's findings of

fact are conclusive. Converse v. Udall,

399 F.2d 616, n.1l (9th Cir. 1968). There-

fore, judicial review is not procedurally a

trial de novo. Doria Min. & Engineerng

Corp. v. Morton, 608 F.2d 1255, n.5 (9th

Cir. 1979). Judicial review is confined to

-49-

the agency record, and it is not appropri-

ate for the reviewing court to consider new

evidence. United States v. Smith Christian

Min. Enterprises, 537 F.Supp. 57, 63

(D.Ore. 1981). An exception is recognized

when the party seeking review alleges that

he has discovered new evidence showing that

the administrative decision was obtained by

fraud. Doria Min. & Engineering Corp. v.

Morton, supra at 1258. No such allegation

has been made here.

Absent exceptional circumstances, a

reviewing court will refuse to consider

contentions not presented before the

administrative proceeding at the appropri-

ate time. Getty Oil Co. v. Andrus, 607

F.2d 253, 256 (9th Cir. 1979). It is for

the agency, not the courts, to determine

whether the admnistrative record should be

reopened to consider new facts, unless the

failure to reconsider can be characterized

an abuse of discretion. Nance v.

-50-

Environmental Protection Agency, 645 F.2d

701, 717 (9th Cir. 1981). Since the IBLA

refused attorney Hayes' request that the

record be reopened to allow the

introduction of further evidence, this

Court allowed additional exhibits to be

submitted in order shee determine

whether the IBLA's refusal was an abuse of

discretion. Although a statistical exhibit

does indicate a significant growth in

demand for sand and gravel in the Las Vegas

Valley tonnagewise as early as 1955, the

same exhibit shows no increase in average

price per ton until 1958. The inference is

that existing sources of supply easily

accomodated the larger demand in 1955.

Even if the new evidence had been

considered by the Hearing Officer or the

IBLA, it would not have been manifestly

unjust for the agency to have declared the

claims null and void for failure of the

claimant to show marketability with a

reasonable expectation of profit.

-$)<

The trier of fact has not abused its

discretion unless there is a definite and

firm conviction that it committed a clear

error of judgement in the conclusion it

reached upon a weighing of the relevant

factors. Anderson v. Air West, Inc., 542

F.2d 522, 524 (9th Cir. 1976). At least

two factors are present here that prevent

such conviction from arising. First, the

agency originally balked at allowing Mr.

MeNutt to represent Mr. Sullivan. It

required a deliberate ratification by

Sullivan of MeNut t's representation before

the latter was allowed to practice before

the Hearing Officer. T e right to counsel

can be waived. United States v. Weiner,

578 F.2d 757, 774 (9th Cir. 1978). The due

process right to counsel in a civil action

ordinarily requires no more than a right to

retain counsel if one so desires. See

Goldberg v. Kelly, 397 U.S. 254, 270

(1970). Ina review of a Securities and

-$2<

Exchange Commission decision, the Ninth

Circuit denied the petitioner's contention

that he should be granted a new hearing

because he had failed to avail himself of

counsel before a hearing examiner. Nees v.

Securities and Exchange Commission, 414

F.2d 211, 221 (9th cir. 1969). The peti-

tioner's request for a new hearing was

denied because (1) he had been afforded an

opportunity to employ counsel for the hear-

ing, (2) no one deprived him of that right,

and (3) the Government was not obligated to

provide him with counsel. Ibid. The same

may be said of Mr. Sullivan. Since the

plaintiff stands in the shoes of Sullivan,

the identical reasoning applies to him.

The second factor which militates

against this Court holding that the admini-

strative agency abused its discretion

concerns the plaintiff directly, and not as

the successor in interest of Mr.

Sullivan. That factor is the effect of

-53-

Nevada's recording statutes. The notice

that the two claims had been adju*icated

null and void was properly recorded. See

NRS 247.120, NRS 517.110. From the time of

its recordation it imparted notice to all

persons of its contents, so that subsequent

purchasers are deemed to purchase and take

with notice. NRS 111.320; NRS 247.190. As

a result, the plaintiff does not have the

status of either a bona fide purchaser,

Hewitt v. Glaser Land & Livestock Co., 97

Nev. 207, 626 P.2d 268, 269 (1981), or a

good faith purchaser. Allison Steel Manu-

facturing Co. v. Bentonite, Ince., 86 Nev.

494, 471 P. 2d 666, 669 (1970). He is

deemed to have knowledge of the contents of

the recorded notice and is not permitted to

disclaim that knowledge. See White v.

Moore, 84 Nev. 708, 448 P.2d 35, 36 (1968);

All Am. Van & Storage v. DeLuca Realty,

Inc., 95 Nev. 253, 592 P.2d 951 (1979). It

is well established that one who is not a

-54-

bona fide purchaser can acquire no greater

interest in the property than that which

the grantor had to convey. Willis v.

Stager, 481 P.2d 78,83 (Or. 1971). At the

time the plaintiff purchased Mr. Sullivan's

purported mining claims, the latter had no

such interest to convey.

The plaintiff's objection to the por-

tion of the Magistrate's report that

declares there was no evidence in the

transcript of any sales or ability to sell

from the claims prior to 1959 is techni-

cally well taken. Some such evidence is to

be found in the administrative record.

However, as discussed above, there is sub-

stantial evidence to support the agency

action nevertheless. The upshot is that

proving his point avails the plaintiff

nothing.

The correct standards of law were

applied by the Hearing Examiner. The pru-

dent man test and the marketability test

-55-

both were applicable. Andrus v. Shell Oil

Co., 446 U.S. 657, n.4 (1980); Edwards v.

Kleppe, 588 F.2d 671, 672 (9th Cir.

1978). The marketability test is usually

the critical factor in cases involving

nonmetallic minerals of widespread occur-

rence. United States v. Coleman, 390 U.S.

599, 603 (1968). In his brief filed subse-

quent to the February 18, 1971, hearing

before hearing Officer Ratzman, Mr.

Sullivan acknowledged that: "Subject to

the usual minor differences, the sand and

gravel material on the two contested claims

is similar to and is useable for the same

general construction and building purposes

as other sand and gravel deposits in the

Las Vegas area." The fact that the Las

Vegas Valley is full of sand and gravel has

been noted. Foster v. Seaton, 271 F.2d

836, 838 (D.C. Cir. 1959).

The fact that the plaintiff has demon-

strated that he has been marketing large

-56-

quantities of sand and gravel from the

claims doesn't establish that the materials

could have been marketed with a reasonable

expectation of profit on or before July 23,

1955. The burden of showing such market-

ability rested on Mr. Sullivan. See Verrue

v. United States, 457 F.2d 1202, 1203 (9th

Cir. 1972); Multiple Use, Inc. v. Morton,

353 F.Supp. 184, 190, 195 (D.Ariz. 1972),

aff'd 504 F.2d 448 (9th Cir. 1974).

As modified and supplemented herein-

above, the Court accepts the Magistrate's

report and the findings contained

therein. The Court accepts the recommenda-

tion of the Magistrate.

IT IS, THEREFORE, HEREBY ORDERED that

the plaintiff's motion to set aside agency

action be, and the same hereby is DENIED.

IT IS FURTHER ORDERED that the motion

to dismiss of defendant United States of

America be, and the same hereby is,

GRANTED.

-57-

DATED: December 30. 1982.

UNITED STATES DISTRICT JUDGE

-58-

ee oe

par ie oO

7 . — ; os

heey |: i? ee

CHARLESTONE STONE PRODUCTS

CO., INC. a corporation,

Plaintiff-Appellee,

Vv.

Cecil D. ANDRUS, Secretary of the

Interior,* and United States of

America, Defendants-Appellants.

No. 75-1532.

United States Court of Appeals,

Ninth Circuit.

May 12, 1977.

Secretary of Interior initiated

contest complaint attacking validity of

placer sand and gravel mining claims filed

in 1942. Only one claim was found to be

valid, and judicial review was sought. The

United States District Court for the

District of Nevada, Bruce R. Thompson, J.,

held that 15 other claims were valid and

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

originally named Secretary. We note the name of his

present successor in office.

-59-

that title holder was entitied to access to

another claim in order to utilize water

produced from well thereon, and appeal was

taken. The Court of Appeals, East, Senior

District Judge, held that: (1) Board of

Land Appeals improperly credited mining

engineer's unfounded opinion of

nonvalidity; (2) seemingly sporadic

operations which were a mirror of building

and construction industry in the area

during and shortly after World War II did

not preclude a finding of validity; and (3)

title holder was entitled to access to a

17th claim in order to utilize water

recovered from well thereon in operation of

other valid claims.

Affirmed.

1. Mines and Minerals 40

| In determining validity of placer sand

and gravel mining claims filed in 1942 the

Board of Land Appeals improperly credited

mining engineer's opinion of nonvalidity

-6U-

where there was no indication that he was

familiar with the area during the crucial

period and his opinion was not based on

personal knowledge of the relevant market

and, more importantly, his opinion was

flatly contradicted by prior report based

on investigation completed within one year

of the crucial period and also by direct

evidence of marketability supplied by

persons who actually witnessed substantial

recoveries from the claims. 30 U.S.C.A.

§611.

2. Mines and Minerals 17(1)

Marketability of pre-July 23, 1955

extraction from placer sand and gravel

mining claims could be tested by factors of

accessibility, bona fides of the operators

in developing the claims, existence of

market demand within reasonable proximity

to the claims and actual participation in

the market. 30 U.S.C.A. S611.

=§}-

3. Mines and Minerals 23(1)

Continuous operation of a placer

mining claim is not a prerequisite to

proving validity of that claim; reason

dictates that periodic cessation of

operation, short of intentional

abandonment, need not defeat ultimate proof

of validity; since a total absence of

operation does not preclude a finding of

validity, it follows tht sporadic operation

does not preclude a finding of validity.

30 U.S.C.A. §611.

4. Mines and Minerals 23(1)

The prudent person test for

determining validity of a placer mining

claim has enough flexibility to allow a

sand and gravel business operator to

undertake an apparently marginal enterprise

if it has a reasonable probability of

success; placer sand and gravel mining

claims, which were filed in 1942, were not

invalid merely because of seemingly

-62-

sporadic operations where such operations

were a mirror of the building and

construction industry in the area during

and shortly after World War II. 30

U.S.C.A. §611.

5. Mines and Minerals 29(3)

Holder of title to placer sand and

gravel mining claims filed in 1942 was

entitled to access to one claim in order to

utilize water recovered from well on such

claim in operation of other valid claims;

record title holder, as original claimant's

successor, had right to appropriate and

utilize as a mineral the water within any

of the claims which met the two-pronged

test of value and success in development.

30 U.S.C.A. S611.

6. Mines and Minerals 29(3)

Water is a "mineral" within meaning of

the placer mining laws. 30 U.S.C.A. S611.

See publication Words and Phrases

for other judicial constructions and

definitions.

-@3-

7. Mines and Minerals 17(1)

Although critical date for determining

validity of placer sand and gravel mining

claims was Juiy 23, 1955, date after which

common variety sand and gravel deposits

were no longer locatable, it was of no

importance that discovery of water on one

claim, which water was sought to be used to

wash sand and gravel mined from other

claims, occurred after July 23, 1955. 30

U.S.C.A. S611.

Appeal from the United States District

Court For the District of Nevada.

Before TRASK and GOODWIN, Circuit

Judges, and EAST,** District Judge.

EAST, Senior District Judge:

The Cause:

Cecil D. Andrus, for the defendants-

appellants, as Secretary of Interior,

(Secretary) appeals the judgment of the

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

Judge for the District of Oregon, sitting by designation.

-64-

District Court holding valid and granting

access to certain placer sand ana gravel

mining claims located in the Las Vegas

Valley in Nevada. We affirm.

The Secretary on November 17, 1965

initiated a contest complaint against the

plaintiff-appellee Charlestone Stone

Products Co., Ine. (Charlestone), attacking

the validity of Charlestone's placer mining

locations for sand and gravel numbered 1

through 22 and numbered 12A and 13A.! The

Administrative Law Judge found Claims 9 and

10 to be valid. On cross-appeals, however,

the Secretary's Board of Land Appeals

(Board) found only Claim i0 to be valid.

Upon judicial review, the District Court,

believing an injustice had been

accomplished, held that "at least the

claims 1 through 16" were valid. It also

held that Charlestone should be granted

1. Claims numbered 12A and 134A located after the year

1955 are not an issue.

-65-

access to Claim 22 in order to utilize, in

the operations of the valid claims, the

water produced from a well driven on Claim

22.

Issues on Review:

While the Secretary asserts the issues

on review in different terms, we deem the

pertinent issues to be:

(1) Whether, upon construing the record

as a whole, the Secretary's finding that

only Claim 10 was valid is supported by

substantial evidence. Multiple Use, Inc.

v. Morton, 504 F.2d 448, 452 (9th Cir.

1974); White v. Udall, 404 F.2d 334, 335

(9th Cir. 1968); and Henrikson v. Udall,

350 F.2d 949, 950 (9th Cir. 1965), cert.

denied, 384 U.S. 940, 86 S.Ct. 1457, 16

L.Ed.2d 1538 (1966).

(2) Whether Charlestone met the two

prong test of establishing: (a) A discovery

of a valuable deposit of sand and gravel on

-66-

each of its claims; and (b) The intrinsic

value of the sand and gravel deposits was

such as “would justify a person of

reasonable prudence in making further

expenditures upon the property with a

reasonable prospect of success in

developing a valuable mine.“ United States

v. Coleman, 390 U.S. 599, 88 S.Ct. 1327, 20

L.ED.2d 170... (1968)." Clear Gravel

Enterprises, Ine. v. Keil, 505 F.2d 180

(9th Cir. 1974), cert. denied, 421 U.S.

930, 95 S.Ct. 1657, 44 L.Ed.2d 87 (1975);

2. That is, whether the sand and gravel "in queston

could be extracted, removed and marketed at « profit

on... duly 23, 1955 when common variety sand and

gravel deposits as here involved became no longer

locatable. 30 U.S.C. §611. United States v. Barrows,

401 F.2d 749 (9th Cir., 1968), cert. denied, 394 U.S.

974, 89 S.Ct. 1468, 22 L.Ed.2d 754... (1969)." Clear

Gravel Enterprises, supra at 180-81. Section 611, in

its pertinent parts, reads: "No deposit of common

varieties of sand, stone, gravel... shall be deemed a

valuable mineral deposit within the meaning of the

mining laws of the United States so as to give

effective validity to any mining claim hereafter

located under such mining laws: Provided, however,

That nothing herein shall affect the validity of any

mining location based upon discovery of some other

mineral occurring in or in association with such a

deposit."

-67-

and Verrue v. United States, 457 F.2d 1202,

1203 (9th Cir. 1972). "The reasonably

prudent man we are concerned with is the

miner who has made his discovery and not

the prospector who is still looking."

Humboldt Placer Mining Co. v. Secretary of

Interior, 549 F.2d 622, 624 (9th Cir.

1977).

Filing and operations of Claims:

Pursuant to the existing statute, A.M.

Murphy and Fred Pine (Murphy) filed placer

mining claims numbered 1 through 22 on

February 18, 1942 in a surface water wash

of the Las Vegas Valley some 15 miles

distant fromt the then center of the city

of Las Vegas. The aggregate acreage of the

several claims approximated 450 acres and

contained a later estimated 20 million

cubic yards of sand and gravel.

The evidentiary record is replete with

eyewitness testimony that the sand and

gravel contained in the area of the claims

-68-

was of excellent quality for various

construction uses and had value as such.

Shortly after the location and filing

of the claims, Murphy's assignee, Southern

Nevada Industries, Inc. (Southern), began

operation within the confines of the claims

and removed some 100,000 yards of material

from a number of places up and down the

wash. Due to the absence of washing water,

Southern transported the raw materials to a

site some five miles distant for crushing,

screening, and washing. The refined

material was used in the construction of an

air force base situated northeast of Las

Vegas. Southern closed the operation in

1943 and moved to an area near Henderson,

Nevada for participation in a World War II

construction project in that area.

Thereafter, during the remainder of World

War II and its aftermath, private

eonstruction in the area was curtailed.

-69-

From September, 1954 until during the

year 1957, one E. H. Brawner (Brawner), as

lessee of the claims, operated under a

royalty agreement of not less than $200 per

month. It is undisputed that at this time

Brawner's sand and gravel operation was

farther from Las Vegas than were the

operations of his competitors. Brawner's

operation was also hampered to some extent

by the absence of a water supply.

Nevertheless he continued to operate the

crushing plant within the limits of Claim

10 and materials were extracted from the

crusher area and "pit" located within that

claim and from other claims in the

canyon. The market demand for the various

types of sand and gravel, together with the

lay of the various materials, dictated the

location of the extractions. Brawner made

profitable sales of the extracted materials

through the year 1957.

-70-

The foregoing narration carries the

operation on the claims through the

critical pre-July 23, 1955 discovery

period. ® The following narration of

operations subsequent to July 23, 1955 is

pertinent, first, to the extent that the

facts might bear upon the proper

application, at the time of the contest

proceedings, of the two prong "value" and

"prudent man" or marketability test

enunciated above; and, secondly, to the

continuity of the marketability of the

extracted materials.

On April 9, 1959, Frank R. Sullivan

obtained title to the claims, extracted

materials which were later stockpiled on

the property, and sold some of the material

as roofing granules.

On January 5, 1960, Charlestone

acquired title to the claims and during

3. See note 2, supra.

-7l1l-

1961 Morrison-Knudsen, Inc., as lessee,

entered the claims, constructed a screening

plant within the confines of Claim 10 and

carried on processing operations.

Unsuccessful efforts were made to drill

screening water wells within Claims 9 and

10, and in 1962, at the cost of some

$3,000, a well supplying adequate washing

water was located within Claim 22. On July

15, 1964, Charlestone leased Claims 1

through 16 to Arden Sand and Gravel Co.

(Arden) for a period of five years with an

annual royalty of $12,000. Although

Charlestone retained Claims 17 through 22,

it agreed to furnish Arden with electrical

power and washing water from the well

within Claim 22.

Action of the Secretary:

During the summer of 1956 while the

Brawner operations were in progress, the

United States Bureau of Land Management in

Nevada employed Messrs. Hill and Lovejoy

-72-

7 - fl ’ p ? ®.¥ eau 7 ’

7 7 a : . 6 = 7 Deal

AG ey Bee ilo 1 5 ‘ys ate (32 5

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Peeeieele as mera, 5]

: i

14 - = €4773

”

‘ ; ops

‘,

‘

:

(Hill), competent engineers and surveyors,

to investigate the validity of the instant

claims. Hill reported that Claims 1

through 22 encompassed a valuable discovery

of sand and gravel deposits and were

valid. The report constituted a

comprehensive and informative discussion of

the factors bearing upon a determination of

marketability of sand and gravel deposits

and of the quality of particular sand and

gravel deposits as of July 23, 1955. After

submission of the Hill report, the Bureau

of Land Management affirmed the validity of

the Brawner claims and removed the area of

the claims from an open small tract

classification.

Nine years later the Secretary

employed Donald G. Fisher (Fisher)4, a

mining engineer, to investigate and report

4. Fisher had been previously employed by the Secretary

in connection with other contests of sand and gravel

claims within the Las Vegas vicinity.

-73-

on the validity of the Charlestone claims.

Fisher gathered hearsay information from

competing sand and gravel operators in the

area and made a visual examination of the

claims in 1965, some ten years after the

crucial date of July 23, 1955. Based upon

his investigation, Fisher opined that all

of the Charlestone claims were invalid for

want of a discovery. The Secretary then

used the Fisher report as a basis for the

contest proceedings.

Administrative Proceedings:

Fisher was the Secretary's sole

witness and his testimony comprised the

only evidence in support of the contest.

Fisher testified to the effect that his

opinion was based upon information gained

as a result of visual examination of

apparent extractions from each of the

claims in 1965 and again in 1969; review of

all mineral reports, as well as the Hill

report; and interviews with local sand and

-74-

gravel dealers, including the present

owners and the past operators of the

claims. Further, he testified that his

opinion was also based upon his familiarity

with the Las Vegas area, where he had

previously been employed by the Government

in making validity determinations and

market studies in mining contest cases.

Fisher, using his version of the test of

discovery, opined that "this was a very

sporadic operation... [It] didn't appear

to be an operation that could sustain a

eontinuous operation over the years" and

the claims were invalid for want of

discovery. In his opinion, the crucial

factors in the invalidity of the claims

were the excessive distance of the claims

from a market and the lack of washing

facilities.

To rebut Fisher's testimony,

Charlestone produced the deposition

testimony of Hill. Hill's testimony

-15-

reaffirmed the conclusion in his 1956

report that all of the claims were valid.

He testified that his opinion of validity

was based upon a personal inspection of the

claims, an investigation of the actual

history of the operation of the claims, and

his knowledge of the marketability of the

product resulting from the thorough study

he had made in conjunction with Mr.

Lovejoy.

Charlestone buttressed Hill's

conclusions with the eyewitness testimony

of several workers who had been employed at

the extraction operations by Southern and

Brawner.®

The decisions of the Administrative

Law Judge and the Board reflect that each

5. The record establishes actual sales from the claim

sites and constitutes an even stronger showing of

marketability than was made in either Melluzzo v.

Morton, 531 F.2d 860 (9th Cir. 1976), or Virrue,

supra. In those cases, this Court, notwithstanding a

total absence of sales from the claim sites, reversed

decisions of the Secretary that certain sand and

gravel claims were invalid.

-76-

gave substantial weight to Fisher's

testimony. At the conclusion of the

hearing, the Administrative Law Judge found

only two of the 22 claims to be valid. On

administrative review, the Board, placing

even more credence on Fisher's opinion,

found only one of the claims to be valid.

Charlestone ultimately and successfully

sought review of the latter decision in the

District Court.

Discussion and Disposition:

Issue 1:

[1] We conclude that the Board's

exclusion of validity of Charlestone's

claims, except as to Claim 10, is not

supported by substantial evidence.

Our conclusion is, first, guided by

the course set in Walker v. Mathews, 546

F.2d 814, 818 (9th Cir. 1976):

"Substantial evidence means that a

finding is supported by ‘"more than

a mere scintilla. It means such

relevant evidence as a reasonable

mind might accept as adequate to

-77-

support a conclusion."' (Richardson

v. Perales (1971) 402 U.S. 389, 401,

91 S.Ct. 1420, 28 L.ED.2d 842). In

applying the substantial evidence

test we are obligated to look at the

record as a whole [6] and not merely

at the evidence tending to support a

finding."

Footnote 6 reads:

"See, Day v. Weinberger (9th Cir.

1975) 522 F.2d 1154, 1156 ('But in

determining whether there is

substantial evidence to support the

examiner's finding a reviewing court

must consider both evidence that

supports, and evidence that detracts

from, the examiner's conclusion. We

cannot affirm the examiner's

conclusion simply by isolating a

specific quantum of supporting

evidence'); Davis, 4 Administrative

Law Treatise §29.03 (1958) ('".

Evidence which may be logically

substantial in isolation may be

deprived of much of its character or

its claim to credibility when

considered with other evidence."');

and Universal Camera Corp v.

N.L.R.B. (1951) 340 U.S. 474, 487-

88, 71 S.Ct. 456, 95 L.Ed. 456."

Secondly, "opinions not supported by

facts, and which are contrary to the

physical facts and do violence to

scientifie prineiple or reason, are robbed

of all probative value." Weinberg v.

-78-

Northern Pac. Ry. Co., 150 F.2d 645, 651

(8th Cir. 1945). See Anderson v. Knox, 297

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

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

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

States v. 102.93 Acres of Land, Ete., 154

F.Supp. 258 (E.D.N.Y.1957), aff'd sub

nom. United States v. Fox, 257 F.2d 805

(2d Cir. 1958).

Finally, this Court has in the past

refused to credit the testimony of

Government witnesses on facts similar to

those in the case at bar. In Verrue,

supra, this Court affirmed the District

Court's reversal of the Secretary's

decision invalidating a sand and gravel

mining claim for lack of discovery of a

valuable mineral deposit. In reaching this

conclusion, the Court noted that the

erucial issue was marketability and that

the testimony of the three Government

witnesses "sheds no light on that issue"

-79-

because none of them had been in the area

of the mining claim during the crucial

period "nor did any one of them have

personal knowledge of the sand and gravel

market during that time." id. at 1204.

Fisher's opinion, on which the

Secretary exclusively relies, neither

avoids the inadequacies noted in Verrue,

supra, nor is it supported by the other

facts in the record. It was based upon an

investigation begun more than ten years

after the close of the crucial period.

Although he stated he was familiar with the

Las Vegas area, there was no indication

that he was familiar with that area during

the crucial period. In addition, his

opinion was not based un personal knowledge

of the sand and gravel market during that

period. Rather, he gleaned his information

solely from a visual inspection of the

terrain, a review of reports and interviews

with others, all conducted more than ten

-80-

years after the crucial period. More

importantly, his opinion was flatly

contradicted by the Hill report which was

based upon an investigation completed

within one year of the crucial period and

also by direct evidence of marketability

supplied by persons who had actually

witnessed substantial recoveries from the

claims up and down the valley or wash. In

light of these factors, we must conclude

that the Board improperly credited Fisher's

unfounded opinion of nonvalidity.

Issue 2-(a):

A discovery of valuable sand and

gravel deposits on Claims 1 through 22,

containing workable deposits of sand and

gravel of like character and quality with

the material in Claim 10, is clearly

established by the record.

Issue 2-(b):

[2] The marketability of the pre-July

23, 1955 extractions can be tested by

-$l-

reason of: (1) Accessibility to the

claims; (2) Bona fides of the operators in

developing the claims; (3) Existence of

market demand within reasonable proximity

to the claims; and (4) Actual participation

in the market. See clear Gravel

Enterprises, supra at 181.

The relevant evidence in the record

established that:

(1) Accessibility of Charleston's

Claims 1 through 22 was readily

available. The area of the wash was not

remote but, to the contrary, readily

available to major public roads;

6. Contrast with the holding in Humboldt Placer Mining

Company v. Secretary, 549 F.2d at 625 (9th Cir.

1977), where this Court reemphasized its holding in

Verrue, supra, that "positive evidence in the record

of marketability’ was not offset by evidence of the

lack of sales of material and the availablility of

comparable material from other sources. 2"

Footnote 2 reads: "in Melluzzo v. Morton, 534 F.2d

860, 863 (9th Cir. 1976), we construed Verrue as

holding that lack or insubstantiality of sales of

material from the claims in question is relevant to

the question of marketability. It is not, however,

conclusvie proof of lack of value. The inference to

that effect, when all evidence is considered, can be

found to have been overcome by evidence of

marketability.”

(2) Charlestone's predecessors in

interest made a bona fide development

and recovery of various grades of sand

and gravel from within the several

claims during the pre-July 23, 1955

period; -

(3) Market demand existed for the

extracted grades of sand and gravel

within reasonable proximity to the

various claims; and

(4) The predecessors actually sold

the recovered material in that market.

The evaluation as to whether

Charlestone met tests (3) and (4) deserves

further comment. Fisher's opinion of

nonvalidity was based primarily upon: (a)

An absence of washing water; (b) The

sporadic operations of Southern and

Brawner; and (c) The prohibitive distance

of the claims from the market. We are

convinced that each of those reservations

was nullified by the only relevant evidence

in the record.

The evidence established that Southern

and Brawner did actually recover sand and

gravel from the claims, transported those

extractions for washing and sold the same

on the market.

-83-

[3] The seemingly sporadic operations

by Southern and Brawner were a mirror of

the building and construction industry in

the Las Vegas area during and shortly after

World War II. Continuous operation of a

placer mining claim is not a per se

requisite to proving the validity of that

claim. Cessation of operation of any

economic enterprise may be caused by

innumerable factors totally beyond the bona

fide intentions of the operator. Reason

dictates that periodic cessation of

operation of a placer mining claim, short

of an intentional abandonment of the claim,

need not defeat ultimate proof of validity.

Since a total absence of operation

does not preclude a finding of validity

(Verrue, supra), it follows that sporadic

operation does not preclude a finding for

validity. The Secretary does not contend

there was a pre-July 23, 1955 abandonment

of the claims by Brawner. In fact, as of

-§4-

July 23, 1955, Brawner was engaged in the

profitable extraction of sand and gravel

from the various claims.

The Fisher postulate of an excessive

distance of the claims from the market is

meaningless. Some competitors in the sand

and gravel business are next door to a

construction project; yet a distant

competitor underbids and successfully

competes with the next door neighbor. The

inescapable fact is that market demand

Supported the recovery and sale of material

from the claims.

[4] The prudent person test has enough

flexibility to allow a sand and gravel

business operator to undertake an

apparently marginal enterprise if it has a

reasonable possbility of success. Relying

on Fisher's opinion, the Secretary deemed

Brawner to have been a foolhardy operator;

yet in many circles, pre-July 23, 1955 Las

Vegas area entrepreneurs would have been

deemed astute.

-85-

Finally, we conclude that the District

Court's finding that "at least the claims

numbered 1 through 16 have been proved

valid" is not clearly erroneous.

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

[5-7] Furthermore we agree with the

District Court's conclusion that

Charlestone must be permitted access to

Claim 22 in order to utilize the water

recovered from the well in the operation of

the other valid claims. However, we reach

our conclusion upon a rationale other than

that relied upon by the District Court.

It is agreed that the Murphy location

notices were lawfully filed unter the Acts

of Congress. Each of the location notices,

covering Claims 1 through 22, described a

"pDiece of mineral bearing ground as a

Placer claim" as distinguished from a claim

location of any particular mineral, either

surface or underground, within that tract

of ground. "A placer location is the

~86-

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location in accordance with those acts [of

congress] of a tract of land for the

mineral bearing or other valuable deposits

upon or within it that are not found in

lodes or veins in rock in place." Webb v.

American Asphaltum Min. Co., 157 F.203, 204

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

of Mining §5.10 (1576).

We are staisfied that Charlestone, as

Murphy's successor, had the right to

appropriate and utilize as a mineral the

water within any of the claims which met

the above two prong test of value and

success in development. It has been said

that "'Mineral' is a word of general

language, and not per se a term of art .

. It is not capable of a definition of

universal application, but is susceptible

to limitation or expansion according to the

intention with which it is used in the

particular .. . statute." Bumpus v.

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

1963).

-87-

Since early times, water has been

regarded as a mineral. "(T]he term

‘mineral’ has been held to embrace water,

particularly subterranean water,

irrespective of the character and quantity

of salts and gases which may be in

solution." 58 C.J.S. Mines & Minerals

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

itself may be classified as a mineral.

United States v. Union Oil Co. of

California, 549 F.2d 1271, 1273 (9th Cir.

1977).

The pertinent Acts of Congress which

allow a prospector to enter and patent

placer claims for valuable minerals do not

expressly define water as a non-mineral.

In Union Oil Co., supra at i273 this Court

hazards that "Congress was not aware of

geothermal power when it enacted the Stock-

Raising Homestead Act in 1916; it had no

specific intention either to reserve

geothermal resources or to pass title to

[the Stock-Raisers]." It is common

knowledge that the successful recovery of

many "hard" minerals from the earth and the

utilization of the soft mineral of water

therewith go hand in hand. American Law of

Mining §2.71 (1976). Therefore, it would

be incongruous for us to hazard that

Congress was not aware of the necessary

glove of water for the hand of mining and

therefrom Congress impliedly intended to

reserve water from those minerals allowed

to be located and recovered. In any event

we decline to do so.

The limitation in 30 U.S.C. §611 on

the location of claims for conmon varieties

of certain named minerals does not apply to

water. In fact, the express language of

§611 exempts from its operation "some other

mineral occurring in or in association wth

such deposit." Therefore, it is of no

importance that the discovery of water

within Claim 22 occurred after July 23,

1955.

-89-

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;

The water recovered from the source

under Claim 22 undeniably has an intrinsic

value in the desert area. There is by the

nature of Charlestone's operations no

evidence of a profitable market of the

water per se for either domestic or

irrigation uses. Nevertheless the only

relevant evidence in the record

demonstrates the existence of a profitable

market of the water as a washing agent for

the sand and gravel recovered from the

valid claims. Although unwashed sand and

gravel has a limited market, good quality

sand and gravel in combination with water

draws a premium market.

We are satisfied that Charlestone has

shown a profitable market for the water

recovered upon Claim 22 and its claim for

‘the extraction of that water is valid.

P This District Court noted that the source of water

under Claim 22 was present on the date of Murphy's

notice of location.

~9)~

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~ RMR MIP Seer ae et Me as eis a oe yea

The judgment of the District Court

entered on November 8, 1974, vacating the

decision of the Board dated January 18,

1973 and remanding the cause to the

Secretary is affirmed, and the cause is

remanded to the District Court for further

order of remand to the Secretary consistent

with the foregoing.

AFFIRMED AND REMANDED.

#§1-

oe?

UNITED STATES COURT OF APPEALS

For The District of Columbia Circuit

No. 14953

EVERETT FOSTER, ET AL., APPELLANTS

V.

FRED A. SEATON, SECRETARY OF THE INTERIOR,

APPELLEE

Appeal from the United States District

Court for the District of Columbia

Decided October 22, 1959

Mr. Leo A. Huard, with whom Messrs.

Ralph E. Becker and F. Murray Callahan were

on the brief, for appellants.

Mr. Claron C. Spencer, Attorney,

Department of Justice, with whom Mr. S.

Billingsley Hill, Attorney, Department of

Justice, was on the brief, for appellee.

Mr. Roger P. Marquis, Attorney, Department

of Justice, also entered an appearance for

appellee.

Before PRETTYMAN, Chief Judge, and

BAZELON and BURGER, Circuit Judges.

-92-

e

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ae a Cn a eee) ne ee eet

<n ee ie ed Sear! z as ese 7 oo

PER CURIAM: This case relates to

Appellants' claims under provisions of the

mining iaws which euthorize "occupation and

purchase" of Government lands containing

"valuable mineral deposits." Rev. Stat.

§2319, 2325, 2329 (1875), 30 U.S.C. §22,

29, 35 (1952). The Department of the

Interior instituted proceedings contesting

the claims on the ground that the allegedly

"valuable mineral deposits" of sand and

gravel, located thirteen miles from the

center of Las Vegas, Nevada, were

insufficient, inter alia, in quantity,

quality and accessibility to a market to

constitute a valid discovery. The hearing

officer rendered a decision favorable to

appellants, but it was reversed by the

Director of the Bureau of Land Management

upon an appeal by rival claimants who had

intervened to assert an interest in the

land under the Small Tract Act, 68 Stat.

239 (1954), 43 U.S.C. §682(a) (Supp. v.

-93-

a

1958). The Secretary of the Interior

sustained the Director's ruling.

Appellants then instituted this suit in the

District Court under the Administrative

Procedure Act to review the Secretary's

decision. On cross motions, the District

Court granted a summary judgement in favor

of appellee and this appeal followed.

Appellants have raised a number of

points relating to errors of procedure and

statutory interpretation allegedly

committed throughout the administrative

process. We have examined them carefully

and find no merit in the contentions. We

discuss them briefly.

Appellants claim that they were

prejudiced easinn (eben venees were

improperly admitted to the hearing, and

that, without such intervention, the ruling

of the initial hearing examiner in favor of

appellants would never have been appealed

and hence never reversed.! It is clear,

-94-

A

however, trat the intervenors as rival

claimants for the land under the Small

Tract Act, allowing the Secretary to lease

or sell vacant Government lands for certain

residential and conmercial uses, were

interested parties. We find no basis for

disturbing the administrative action with

respect to this intervention.

Appellants also contend that the

hearing examiner erroneously denied their

request to examine a confidential document

from which a Government witness was

testifying. The record shows that upon the

witness' claim of a governmental privilege

appellants' counsel withdrew his request

for disclosure. Thereafter the hearing

officer expressly stated that he would, if

again requested, rule in appellants'

favor. Since the objection was not

revived, the point is plainly not now

available to appellants.

-95-

Appellants' third allegation of error

is that the Secretary failed to hold the

Government to the standard of proof

required by the Administrative Procedure

Act, which states that "the proponent of a

rule or order shall have the burden of

proof." 60 Stat. 241 (1946), 5 U.S.C.

§1006 (1952). The Secretary ruled that,

when the Government contests a mining

claim, it bears only the burden of going

forward with sufficient evidence to

establish a prima facie case, and that the

burden then shifts to the claimant to show

by a preponderance of the evidence that his

claim is valid.2 The short answer to

appellants' objection is that they, and not

the Government, are the true proponents of

a rule or order; namely, a ruling that they

have complied with the applicable mining

2. This is the standard which the Department of Interior

has applied for a number of years. See United States

v. Strauss, 59 I.D. 129 (1945).

-96-

laws. One who has located a claim upon the

public domain has, prior to the-discovery

of valuable minerals, only "taken the

initial steps in seeking a gratuity from

the Government." Ickes v. Underwood, 78

U.S. App. D.C. 396, 399, 141 F.2d 546, 549,

cert. denied, 323 U.S. 713 (1944); Rev.

Stat. 2319 (1875), 30 U.S.C. §23 (1952).

Until he has fully met the statutory

requirements, title to the land remains in

the United States. Teller v. United

States, 113 Fed. 273, 281 (8th Cir.

1901). Were the rule otherwise, anyone

could enter upon the public domain and

ultimately obtain title unless the

Government understood the affirmative

burden of proving that no valuable deposit

existed. We do not think that Congress

intended to place this burden on the

Secretary.

Appellants' principal assignment of

error is that the Secretary misinterpreted

-97-

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the statute by requiring a demonstration of

present value. They earnestly contend that

their claim can also be sustained on the

bacis of prospective market value.

The statute says simply that the

mineral deposit must be "valuable." Rev.

Stat. §2319, 30 U.S.C. §22. Where the

mineral in question is of limited

occurrence, the Department, with judicial

approval, has long adhered to the

definition of value laid down in Castle v.

Womble, 19 I.D. 455, 457 (1894):

Where minerals have been found and

the evidence 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, the requirements of the

Statute have been met.

With respect to widespread non-

metallife] minerals such as sand and

gravel, however, the Department has

stressed the additional requirement of

present marketability in order to prevent

-98-

the misappropriation of lands containing

these materials by persons seeking to

acquire such lands for purposes other than

mining. Thus, such a "mineral locator or

applicant, to justify his possession, must

show that by reason of accessibility, bona

fides in development, proximity to market,

existence of present demand, and other

factors, the deposit is of such value that

it can be mined, removed and disposed of at

a profit." Layman v. Ellis, 54 I.D. 294,

296 (1933), emphasis supplied. See also

Estate of Victor E. Hanny, 63 I.D. 369,

370-72 (1956). Particularly in view of the

circumstances of this case, we find no

basis for disturbing the Secretary's

ruling. The Government's expert witness

testified that Las Vegas Valley is almost

entirely composed of sand and gravel of

similar grade and quality. To allow such

land to be removed from the public domain

because unforeseeable developments might

-99-

some day make the deposit commercially

feasible can hardly implement the

congressional purpose in encouraging

mineral development.

Thus the case really comes down to a

question whether the Secretary's finding

was supported by substantial evidence on

the record as a whole. We thing it was.

There may have been substantial evidence

the other way also, but we do not weigh the

evidence. The testimony of Shafer and his

colleagues in support of the Government was

clearly substantial and most certainly was

not destroyed. He was an experienced man,

knew sand and gravel, knew the Las Vegas

area, and his testimony was clear, succinct

and convincing.

Affirmed.

-100-

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ROBERT L. MENDENHALL

No. 83-1751

Appellant,

D.C. No.

vs. CV-R-80-146-ECR

UNITED STATES OF

AMERICA, and UNITED

STATES DEPARTMENT OF

INTERIOR, et al.,

MEMORANDUM*

Appellees.

Appeal from the United States District

Court for the District of Nevada

Edward C. Reed, District Judge, Presiding

Argued and Submitted: March 16, 1984

Before: TANG and PREGERSON, Circuit Judges,

and HATTER** District Judge.

Robert L. Mendenhall apneals the

district court's affirmance of the Interior

ag The panel has concluded that this appeal presents

issues that do not meet this court's standards for

disposition by written opinion. See 9th Cir. R. 21.

Therefore, we order disposition ‘by memorandum

rather than by publication in the Federal Reporter.

This memorandum may not be cited to or by the

courts of this circuit.

** Hon. Terry J. Hatter, Jr., United States District

Judge, Central District of California, sitting by

designation.

-101-

es

o¢ }. li

—

< “— a

Seer ae

Board of Land Appeals' (IBLA's) decision

declaring his sand and gravel land claims

null and void. We affirm.

In reviewing a decision of the IBLA or

a Department of the Interior Hearing

Officer, we consider only whether the deci-

sion was arbitrary, capricious, an abuse of

discretion, or not in accordance with

law. Melluzzo v. Watt, 674 F.2d 819, 820

(9th Cir. 1932); 5 U.S.C. 706 (2) (e)

(1982). The proper standard for evaluating

a placer discovery is whether a reasonable

prospect of success exists for the mining

operation, including consideration of

exploration, development and present mar-

ketability. United States v. Coleman, 390

U.S. 599, 602 (1968); Best v. Humboldt

Placer Mining Co., 371 U.S. 334, 335-36

(1963); Barton v. Morton, 498 F.2d 288, 291

(9th Cir.,),cert. denied, 419 U.S. 1021

(1974); Castle v. Womble, 19 Pub. Lands

Dee. 455 (1894). In the case of sand and

-102-

i S71

j ot

=

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¢

; eta A M = ' ,-@bhs t<6 ee

ae 74 = } 7 age 4 ; 2S 1 ise el

aie - ne a -

=

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ie Ps n n> dl ~ al 7 M aa yoo tiy } a

ee P°Yuise=. 722 Bear gat. -eh7o aor e+) ane

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een aan) yeh ora S39 ei 23r PeL2 ee ae aa

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gravel claims, the discovery evaluation

standard must be applied as of July 23,

1955. 30 U.S.C. 611 (1976).

The Hearing Officer's finding that

Mendenhall's predecessor-in-interest,

Sullivan, failed to carry his burden of

showing marketability potential as of July

23, 1955 is supported by substantial evi-

dence. The Hearing Officer found that

Sullivan's "statements relating to removal

of sand and gravel were couched in very

general terms." The value of the claims as

of July 23, 1955 was not established.

Sullivan was the only witness on behalf of

his own claim, and the Hearing Officer

found that he "present[ed] only infirm or

inconsistent recollection rather than

adequate records or other reliable

evidence." The Hearing Officer found that

Sullivan failed to show that sand and

gravel was marketed or that there was a

profitable outlet for sand and gravel as of

-103-

~3Qrs

t

a> aba

July 23, 1955. The Hearing Officer applied

the proper standard, and nothing in the

record establishes discovery and marketa-

bility potential as of July 23, 1955.

After the government established a prima

facie case, the burden of proving marketa-

bility rested on Sullivan. Humboldt Placer

Mining co. v. Secretary of Department of

Interior, 549 F.2d 622, 624 (9th Cir. 1977)

(citations omitted). Because the showing

was not made, the Hearing Officer's

decision was proper.

AFFIRMED.

Filed: May 1, 1984

Phillip B. Winberry

Clerk, U.S. Court of Appeals

-104-

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UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ROBERT L. MENDENHALL

Appellant, No. 83-1751

Vs.

AMERICA, and UNITED

STATES DEPARTMENT

OF INTERIOR, et al,

)

)

)

.

UNITED STATES OF ) ORDER

)

)

)

)

Appellees. )

)

Before: TANG and PREGERSON, Circuit Judges,

and HATTER* District Judge.

The panel as constituted above has

voted to deny the petition for rehearing.

Judges Tang and Pregerson voted to reject

the suggestion for rehearing en banc and

Judge Hatter recommended such rejection.

The full court has been advised of the

suggestion for rehearing en banc, and no

judge of the court has requested a vote on

the suggestion for rehearing en bane. Fed.

R. App. P. 35 (b).

° The Honorable Terry J. Hatter, Jr., United States

District Judge for the Central District of California,

sitting by designation.

-105-

The petition for rehearing is denied,

and the suggestion for rehearing en banc is

rejected.

Filed: June 28, 1984

Phillip B. Windberry

Clerk U. S. Court of Appeals

-106-

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

ROBERT L. MENDENHALL

Plaintiff, Civil No.

R-80-146-ECR

Vv.

| AFFIDAVIT OF

THE UNITED STATES OF GEORGE A. KIERSCH

AMERICA, THE UNITED

STATES DEPARTMENT OF

INTERIOR, and CECIL D.

ANDRUS, Secretary of

the Interior and

EDWARD F. SPANG, State

Director of Nevada

Bureau of Land

Management,

Defendant.

ll ee ee ee

AFFIANT, being first duly sworn upon

oath, avows and deposes as follows:

1. That I, GEORGE A. KIERSCH, Affiant

herein, am a registered professional geolo-

gist and engineer in Arizona (1750) and in

California as geologist (928) and engineer-

ing geologist (362) with degrees of

Geological Engineer and Ph.D.

(geology/mining). My varied geological

experience over a 40-year span is mainly

relevant to engineering and mineral

-107-

resources projects, having served as a

Consultant, Manager of Exploration and/or

Geologist for over 100 projects in the

United States and in foreign countries. My

address is: 4750 N. Camino Luz, Tucson,

Arizona 85718. A specific description of

my background is set forth in the attached

resume as Exhibit "A".

2. That 1 examined the Charleston

claim numbers 24/39 (involved with the

lawsuit described above) and numbers 1-23

on the edge of the Spring Mountains as to

their geologic setting, origin and princi-

pal characteristics of the aggregate

deposits thereon, end associated

features. The naturally high-quality ag-

gregate deposits that occur throughout the

claims were examined for composition and

physical properties. Their use for asphalt

concrete aggregate was reviewed in-depth

with Mr. Robert L. Mendenhall of Las Vegas

Paving Company. The following reports,

-108-

maps, and sources of information on the

geology, aggregate resources and production

records for the deposits were reviewed:

a. Dames & Moore Consultants, 1968,

Report of investigation of sand and

gravel placer claims near Las Vegas,

Nevada for Charleston Stone

Products: By Toland, George C.

April 30, 1968.

b. Randle Associates, 1981, Results of

tests for consumption asphalt

cement: For Las Vegas Paving Co.,

(May 20, 1981).

ec. Western Technologies, 1982, Results

of tests for consumption asphalt

cement: For Las Vegas Paving Co.

(June 24, 1982).

d. U.S. Bureau of Land Management,

1982, Contract agreement for sale of

sand/gravel (Base Course) to Gilbert

Development Corp. (January i3,

1982).

-109-

Longwell, C.R., Pampeyan, E.H.,

Bousyen, Ben, and Roberts, R.J.,

1965, Geology and mineral deposits

of Clark County Nevada: Nevada

Bureau of Mines Bulletin 62, 177p,

maps.

Burehfeld, B.C., Fleck, R.J., Secor,

D.T., Vineelette, R.R. - and Davis,

G.A. 1974, Geology of Spring

Mountains, Nevada: Geological

Society of America Bulletin, Vol.

85, P. 1013-1022.

Las Vegas Paving Co., 1982, Summary

of aggregate production July 1979 -

August, 1982 (August 23, 1982).

Maps of Charleston Stone/Sullivan

Claims (No. 1-23 and 24/39).

Topographic maps of Corn Creek

Springs and Blue Diamond quadrangles

Nevada: U.S. Geological Survey

1:62,500, 1952 edition.

-110-

3. That I, after examining the aggre-

gate deposits in the field and discussing

their production history and service record

with R. L. Mendenhall, Plaintiff in this

lawsuit, have the following observations:

a.

The physical characteristics and

origin of the aggregate deposits on.

the Las Vegas Paving Company Claims

(24/39) are similar to and inter-

related with the Charleston Stone

Claims (1-23).

The aggregate deposits occur within

a narrow valley carved in the

steeply dipping Goodspring Dolomite

beds (Spring Mountains) and continue

eastward as a zone in the alluvial

materials at the mouth of the

canyon. The Spring Mountains are

broadly folded and highly faulted.

The Keystone thrust fault, a major

feature of the Spring Mountains, is

located immediately to the south of

-ill-

the canyon where Claims 1 through 9

are located.. The deformation of

the bedrock by the Keystone thrust

actions have contributed to the

widespread faulting and fracturing

of the dolomite/limestone beds in

the vicinity of the canyon. Conse-

quently, when these beds deteriorate

and are broken down by erosion and

weathering processes, small sharp to

angular rock fragments are formed --

largely under l-inch in size.

Normal fluvial processes have

distributed the varied-sized

dolomite/limestone rock fragments

along the canyon and throughout a

limited area beyond the enuients

mouth and edge of the mountain

slopes.

The naturally occurring aggregate

deposit throughout the area of

Claims 24/39 and the Earlier Claims

-113-

1

10 to 23 consists of angular broken

pieces of limestone rock with only

minor rounding thai are predo-

minantly of well-graded sizes under

l-inch. The clean aggregate with

only minor silt content consists of

many-sided (6-8) rock fragments.

Their ideal shapes allow the indivi-

dual pieces of aggregate to knit and

chink more closely together than a

manufactured aggregate..

The zone of naturally occurring

aggregate is up to 15 feet thick in

some parts of the Claims (24/39).

The aggregate deposit is normally

overlain by a thin, near-surface cap

or zone of caliche-bearing

sand/gravel, 3 to 6 feet thick.

Recent geologic activity (regional

uplift) has caused the intermittent

water runoff from the canyon slopes

to downcut through the zone of

-113-

caliche cap throughout the

approximate area of Claims 10

through 16. This downcutting has

exposed the high-quality aggregate

deposit in this sector and therefore

essentially no stripping of

overburden is necessary for mining.

The angular, well-graded aggregate

requires no washing and no crushing

to meet specifications for use as

asphait concrete.

The natural gradation sizes of the

pit-run aggregate fali within the

range of asphalt concrete

specifications. Consequently, only

screening of the aggregate is needed

to provide a balanced product for

asphalt concrete... An ccecasional

block and piece greater than l-inch

im size is wasted by the screening

process.

-114-

g. The caliche-bearing overburden

material of lower-quality is

satisfactory for Base Course (ABC)

uses.

4. That I determined there are some

physical properties and qualities which

make the unique aggregate deposits of Las

Vegas Paving Company (No. 24/39) specially

useful in the industry for asphalt con-

crete, such as:

a. The natural occurring aggregate

deposits on Claims 24/39 are clean

and well-graded. The screened

product meets grading specifications

directly and the pit-run aggregate

requires no washing and no

crushing. Furthermore, there is

almost no waste product of oversize

rock pieces.

b. The dolomite/limestone aggregate

requires considerably less asphalt

consumption to meet asphalt concrete

-115-

standards than other aggregates in

the region. This aggregate requires

only 3.5 to 3.8% asphalt binder

while the normal aggregate from this

region requires 5% asphalt binder to

meet standards. Consequently the

Las Vegas Paving Company aggregate

saves some 20 percent in asphalt

costs for concrete mix. (For every

1% below the 5% normal there is a

$1.80/ton saving).

The specific gravity of the pit-run

aggregate averages 5 to 10 pounds

heavier, at 161 pounds per volume

unit, than the normal Las Vegas

region aggregate at 149

pounds/volume unit. This

characteristic is due to the natural

angular shapes of the rock fragments

which allow the close chinking and

locking of grains in a mixture.

This unique property of the

-116-

naturally occurring aggregate is

Superior to the grain locking of a

manufactured aggregate.

d. The well-graded natural occurrence

of the aggregate -- requiring no

crushing -~- reduces production cost

some $0.50/ton.

e. The several special and unique

characteristics of the aggregate

deposits combine for a very high-

quality product at much lower

overall costs for the production of

asphalt concrete -- about $3.20/ton

below the costs for a norma 1

gravelly material in the Las Vegas

region.

5. That therefore, in my judgement,

the deposit of naturally occurring, high-

quality aggregate throughout the Charleston

24/39 placer mining claims is a valuable

mineral deposit which possesses properties

giving it distinet and special values for

-11T-

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which a long-term and expanding asphalt

concrete market exists in the Las Vegas

area for the forseeable future.

FURTHER, Affiant sayeth not.

George A. Kiersch

GEORGE A. KIERSCH

STATE OF ARIZONA )

a ae.

COUNTY OF MARICOPA )

On this 3lst day of August, 1982,

personally appeared before me, the under-

signed officer, George A. Kiersch, who

acknowledged the above instrument.

Donna Metcalf

Notary Public

My commission expires May 3, 1986

-118-

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UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

ROBERT L. MENDENHALL

Civil No.

Plaintiff, R-80-146-ECR

Vv. AFFIDAVIT OF

THE UNITED STATES OF ROBERT L.

AMERICA, THE UNITED MENDENHALL

STATES DEPARTMENT OF

INTERIOR, and CECIL D. EXHIBIT 10

ANDRUS, Secretary of

the Interior and EDWARD

SPANG, State Director

of Nevada Bureau of

Land Management,

Defendant.

ee ee ee ae ae a ae ee ee ee ee ee ee ee ee See Se”

AFFIANT, being first duly sworn upon

oath, avows and deposes as follows:

1. That I, Robert L. Mendenhall, the

President of Las Vegas Paving Corporation

and the Plaintiff herein, purchased the

Charleston #24/39 association placer mining

claim on March 7, 1979, which at that time.

contained excavations evidencing past

production of from fifty thousand to one

hundred thousand tons of naturally

occurring high quality asphalt concrete

-119-

aggregate (N.O.H.Q.A.C.A.) and the Charles-

ton 1 through 22 claims to the north

contained evidence of production of at

least three times that quantity for the

previous forty years. (See Exhibit 8

attached hereto).

2. That I was born into the asphalt

concrete aggregate business in that my

father and his father before him special-

ized in the asphalt paving business in

central Utah.

3. That in 1954 I moved to Las Vegas,

Nevada, started the Las Vegas Paving Corpo-

ration, pioneered hot-mix asphalt recycling

in America and have 28 patents for both

equipment and processes for the Asphalt

Concrete Aggregate Industry.

4. That during my thirty years working

with Asphalt Concrete Aggregate, I have

examined hundreds of aggregate sources in

Utah, Nevada, California and Arizona and

calculated the costs of processing the rock

-120-

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occurring thereon into high quality Asphalt

Concrete Aggregate.

5. That in early 1978 while searching

for a source of High Quality Aspalt Con-

crete Aggregate in the Las Vegas area I

flew the surrounding hills in search of

such an aggregate source and first saw the

Charleston claim area from the air, then

visited the ground and found that this

pitted area, within easy access of Las

Vegas, contained a naturally occurring

crushed and sorted aggregate that was

uniquely suited for Aspalt Concrete

Aggregate.

6. That I then went in search of the

claim owners and found that Mr. Frank

Sullivan owned the Charleston claims and I

took an option to purchase the claims. Mr.

Sullivan represented that he owned the

claims and I went to the County recorder

and searched the record for evidence that

Sullivan owned the Charleston claims, and

-121-

ee tiie

found nothing that would indicate that the

claims were not in good standing and then

exercised my option and went to producing

aggregate therefrom.

7. That as I produced the aggregate

and used it in our hot asphalt mix designs

- confirmed my belief that we had a super-

ior quality aggregate which we could pro-

duce directly from the claims without

crushing, washing, or any treatment other

than screening out random oversized boul-

ders and thus we had a Naturally Occurring

High Quality Aggretate (N.O.H.Q.A.C.A.)

which had the following qualities possessed

by no other Asphalt Concrete Aggregate:

a. The naturally occurring angular

fragments lie an optimum distance from

the source so that the corners are

rounded just enough to fit snugly

together to form a very dense finished

product.

-122-

The angular fragments are naturally

sorted so that they fit all standard

specifications for asphalt concrete

aggregate.

The angular fragments on Charleston

24/39 can be screened to produce

surfacing "chips" (- 3/8th to +

3/16ths) for asphalt concrete pavements

without crushing or other treatment of

any kind.

This naturally occurring high quality

asphalt concrete aggregate requires low

levels of asphalt (3.5% to 3.8%) where

normal manufactured aggregates in the

Las Vegas area require approx. 5%

asphalt.

The density of the result.ing asphalt

mix is higher than the normal asphalt

aggregate by some 5 to 10 pounds per

cubie foot.

-123-

FURTHER, Affiant sayeth not.

Robert L. Mendenhall

Robert L. Mendenhall

STATE OF NEVADA )

> 8.

County of Clark )

On this 9th day of Sept., 1982, before

me personally appeared Robert L. Menden-

hall, who acknowledged this document before

me.

Rosemarie Heide Ward

Notary Public

My commission expires:

Sept. 17, 1983

-124-