Opposition Brief — Dunbar Stone Co. v. United States

Office Supreme Court, U

2) FILED

MAY 24 1935

Iu the Supreme Cont of the United States

OCTOBER TERM, 1984

DUNBAR STONE COMPANY, INC., ET AL., PETITIONERS

Vv.

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MEMORANDUM FOR THE RESPONDENTS

IN OPPOSITION

REX E. LEE

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Cases: Page

Andrus v. Shell Oil Co., 446 U.S. 657 -..................... 2

Boyle v. Morton, 519 F.2d 551, cert. denied, 423

Cee oli iescnisanibanion 5

Brubaker v. Morton, 500 F.2d 200 _...........-22.0--2.. 5

McClarty v. Secretary of the Interior, 408 F.2d

a ding es eae sacusen 3,4

United States v. Coleman, 390 U.S. 599 _..........0........ 2

Statutes and regulation:

Act of July 23, 1955, § 3, 30 U.S.C. 611 .................... 2,3

Act of May 10, 1872, 30 U.S.C. 22 et seq. ................ 1

Materials Act of 1947, 30 U.S.C. 601 et seq. _........... 2

REE CS: AS emo OUR tive 2

(1)

Iu the Supreme Court of the United States

OcTOR™« TERM, 1984

No. 84-1680

DUNBAR STONE COMPANY, INC., ET AL., PETITIONERS

Vv.

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MEMORANDUM FOR THE RESPONDENTS

IN OPPOSITION

The only question properly presented by the peti-

tion is whether the determination by the Secretary of

the Interior that petitioners’ schist did not qualify as

an “uncommon variety” of building stone is supported

by substantial evidence.

1. The general mining law (the Act of May 10,

1872, 30 U.S.C. 22 et seg.) invites citizens of the

United States to locate and remove “all valuable

mineral deposits in lands belonging to the United

States * * *,” and, upon satisfaction of minimal re-

(1)

2

quirements and a very modest payment, to obtain

ownership of the land as well. See, e.g., Andrus v.

Shell Oil Co., 446 U.S. 657, 658-659 n.1 (1980).

But, by Section 3 of the Act of July 23, 1955 (Com-

mon Varieties Act), 30 U.S.C. 611, Congress with-

drew common varieties of minerals from location un-

der the mining law, declaring that “[n]o deposit of

common varieties of * * * stone * * * shall be deemed

a valuable mineral deposit within the meaning of the

mining laws of the United States so as to give effec-

tive validity to any mining claims * * *.” Instead,

such minerals became subject to disposition under the

Materials Act of 1947, 30 U.S.C. 601 et seg., which

provides for sale of mineral and vegetative ma-

terials on federal lands without affecting title to the

land itself. The concern was that immense areas

of the public domain would be appropriated without

compensating benefit to the Nation if the mining laws

continued to apply to common varieties of building

stone and common types of sand and gravel. See

United States v. Coleman, 390 U.S. 599, 603-605

(1968).

The question remains, of course, what is a “com-

mon variety.” Section 3 of the 1955 Act provides

that it shall not affect “deposits of [the listed] ma-

terials which are valuable because the deposit has

some property giving it distinct and special value.”

To implement the provi'0, the Department of the In-

terior issued a regulation that defined “[c]ommon va-

rieties” as including “deposits which, although they

may have value for use in trade, manufacture, the

sciences, or in the mechanical or ornamental arts, do

not possess a distinct, special economic value for such

use over and above the normal uses of the gener!

run of such deposits.” 43 C.F.R. 3711.1(b). A leau-

3

ing judicial decision has elaborated on this test by

identifying five guidelines for determining whether

a mineral deposit is a common variety:

(1) [T]here must be a comparison of the

mineral deposit in question with other deposits

of such minerals generally; (2) the mineral de-

posit in question must have a unique property;

(3) the unique property must give the deposit

a distinct and special value; (4) if the special

value is for uses to which ordinary varieties of

the mineral are put, the deposit must have some

distinct and special value for such use; and (5)

the distinct and special value must be reflected

by the higher price which the material commands

in the market place.

McClarty v. Secretary of the Interior, 408 F.2d 907,

908 (9th Cir. 1969).

2. The mining claims here involve land within

Prescott National Forest in Arizona. Petitioners’

predecessor located 13 lode claims many years ago;

they were abandoned, have been declared invalid, and

are no longer at issue. Directiy overlying these lode

claims are 13 placer claims, located in September of

1976. On February 28, 1978, the Bureau of Land

Management of the Department of the Interior filed

a contest proceeding charging that 13 lode claims

were void for lack of a discovery and that the lands

embraced within their limits were non-mineral in

character. The complaint also alleged that the deposit

of stone, a variety of schist called Yavapai schist,

found within the limits of the 13 overlying placer

claims were not a valuable mineral deposit within

the meaning of Section 3 the Common Varieties Act.

Pet. App. 27a.

4

On June 24, 1980, after a two-day hearing, an ad-

ministrative law judge (ALJ) invalidated all of peti-

tioners’ mining claims. Pet. App. 26a-37a. On ap-

peal, the Interior Board of Land Appeals (IBLA) af-

firmed the ALJ’s decision that, although the Yavapai

schist was marketable at a profit, it failed to meet

the test of “unique property” outlined by the Ninth

Circuit in the McClarty case and in the regulations

for it to qualify as an “uncommon variety” (Pet.

App. 14a-25a). The IBLA based this finding on the

existence of vast quantities of comparable schist in

the area and the absence of special economic value

for petitioners’ schist. Pet. App. 14a-25a. One wit-

ness had testified that 40 billion tons of schist could

be found in Yavapai County and that another 16

billion tons could be found in neighboring Maricopa

County. Another witness estimated the amount of

stone within the claims at 60 million tons. Pet. App.

20a-24a.

While the IBLA noted that the record showed that

petitioners’ schist had a pleasant coloration and that

it could be blasted out and broken in such a manner

as to tend to maintain sharp, unfeathered edges, pe-

titioners’ witnesses failed to show that their schist

could command a premium price in the market, or

that it could be produced at a reduced cost, as the

McClarty decision and the regulations require. Pet.

App. 14a-22a.

3. Petitioners filed an action for a declaratory

judgment in the district court challenging the IBLA’s

decision. The United States counterclaimed for dam-

ages and injunctive relief. On March 9, 1983, the

district court granted a partial summary judgment

on the declaratory judgment claim in favor of the

United States (Pet. App. 12a-13a). The parties sub-

sequently settled the counterclaim.

5

Petitioners appealed the holding that the 13 un-

patented placer mining claims were invalid. (They

did not challenge that part of the district court’s de-

cision holding that the 13 lode claims were invalid.)

On January 24, 1985, the court of appeals, by

reported memorandum, affirmed the district

decision (Pet. App. la-lla). The court

IBLA’s determinations that vast quanti

exist in Arizona, and that petitioners’ schist

special economic value, were supported by substan

evidence. Pet. App. 8a. The court also

IBLA was correct in refusing to consider the

unique qualities in the absence of an economic

vantage. Pet. App. 9a. The court further held

since petitioners’ stone did not command a premium

price in any market their argument that their stone’s

unique qualities expanded the available market was

z 4

SF op

Rites

a

than petitioners’ schist. Pet. App. 10a.

4. The decision of the court of appeals is correct,

and is supported by longstanding and consistent ad-

ministrative and judicial construction of the relevan+

statutes.’ It does not conflict either with the decisions

of other circuits, or with any decision of this Court.

Accordingly, further review is not warranted.

Petitioners assert (Pet. 13-19) that the Secretary

and the courts applied the wrong test in determining

See, e.g., Brubaker v. Morton, 500 F.2d 200 (9th Cir.

1974) ; Boyle v. Morton, 519 F.2d 551 (9th Cir.), cert. de-

nied, 423 U.S. 1033 (1975).

whether they had satisfied their burden of showing

the schist on their claims was not a common va-

of stone within the meaning of Section 3 of the

Act. This contention is wholly without merit.

The IBLA found that schist exists in vast quantities

of stone. The record showed that petitioners’

schist did not command either a premium price or

reduced production cost. Petitioners’ attempt to fash-

ion a test, whereby building stone need only have

“some property” giving the deposit distinct and spe-

cial value, is meaningless.

Petitioners’ argument (Pet. 19-23) that IBLA and

the courts below failed to demonstrate that petition-

ported by substantial evidence. Finally, petitioners’

complaint (Pet. 23-28) that the Ninth Circuit re-

jected consideration of technical or economical data

which petitioners submitted for the first time on ap-

peal in this case is incorrect. Although the court

could have rejected the proffered evidence as un-

timely, the court did consider it and found that it did

not avail petitioners. The court of appeals noted peti-

tioners’ attempt to compare their schist, which sells

at $55.00 per ton, with all stone sold in Arizona,

which sold at $4.24 per ton and which figure included

crushed stone, which sells at $3.58 per ton. The court

noted that the record showed that a nearby competi-

tor also produces stone at about the same price as do

petitioners. Pet. App. 10a. Petitioners’ data also

showed that the average price of building stone in

7

Arizona sold for $113.04 per ton, more than double

the price of petitioners’ stone. Accordingly, the court

correctly concluded (ibid.) that petitioners’ data

proved nothing.

It is therefore respectfully submitted that the peti-

tion for a writ of certiorari should be denied.

Rex E. Lee

Solicitor General

MAY 1985

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