# Petition for Writ of Certiorari — Kinross Copper Corp. v. Oregon

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2000
- **Citation:** 531 U.S. 960

## Text

Bi orriv:. OF THE CLERK

In the Supreme Court
of the United States

October Term, 2000

KINROSS COPPER CORPORATION, a foreign
corporation,
Petitioner,
Vv.

STATE OF OREGON,
Respondent.

ON PETITION FOR WRIT OF CERTIORARI
TO THE OREGON COURT OF APPEALS

PETITION FOR WRIT OF CERTIORARI

Phillip D. Chadsey*
Jerry R. Fish
Michael R. Campbell
David E. Van’t Hof
James N. Westwood
*Counsel of Record
STOEL RIVES tip
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204-1268
(503) 294-9376
Counsel for Petitioner

September 14, 2000

i

QUESTIONS PRESENTED

1. When an unpatented mining right protected
by federal law is abrogated by a state regulation prohibiting
discharge of nonpolluting mine waters, does a taking occur
under the Fifth Amendment’s Takings Clause?

2. Is a state regulation that prohibits the
discharge of nonpolluting mine waters, and thus prevents an
unpatented mining claim on federal lands from being
developed, preempted by federal law?

a Does takings jurisprudence require a property
owner to show that it has a property interest in the very
thing the state seeks to regulate, rather than merely showing
that the effect of the regulation as applied to the petitioner
denies it all economic use of a federally recognized property
right?

4. Can a state court, under the guise of stating
that the holder of an unpatented mining claim never had the
right to appropriate water for the mine and, therefore, never
had the right to discharge it as a part of its property right,
thus avoid a “taking,” when at common law it was not a
nuisance for a miner to discharge nonpolluting mine waters
into streams?

li

PARTIES TO THE PROCEEDING
The caption contains the names of all parties to this

proceeding.

lll

CORPORATE DISCLOSURE STATEMENT

Petitioner Kinross Copper Corporation is Nevada
corporation and is a wholly owned subsidiary of Kinross
Gold USA, Inc., which is also a Nevada corporation.
Kinross Gold USA, Inc. is a wholly owned subsidiary of
Kinross Gold Corporation, which is an Ontario, Canada
corporation that is publicly held.

iV

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED ... 0... 2c cece cence i
PARTIES TO THE PROCEEDING ............. il
CORPORATE DISCLOSURE STATEMENT ....... ill
TABLE GP COINTEINGS 6 sc oe 6 ewe 0 oe ie ee iv
TABLE OF APPENGMGCES «occ sete reece vi
TABLE OF AUTHORITIES ...... Tere ee ee oe Vii
PETITION FOR WRIT OF CERTIORARI .......... l
CRUG BAP ca ev ee ke eee ae teen 1
STATEMENT OF JURISDICTION .............. 2
CONSTITUTIONAL PROVISIONS INVOLVED ..... 3
STATUTORY AND ADMINISTRATIVE
PROVISIONS ENVOL VER? oc oss sie eee 4
STATEMENT OF Tite CASE 2. cos 6 ie on sass 5
A. Provedetss MUEY ..... 5 6 be A eee 5
B. ;:; 2c Perera eee Pe ere ea 9
REASONS FOR GRANTING THE PETITION ...... 11

I. This Case Involves Four Important
Constitutional Questions That Should
Be Resolved by This Court.......... 12

Page
Il. The Petition Should Be Granted
Because the Decision Below Conflicts
with Decisions of This Court and
Cher Foceral Comms... cc ce ees 15

CONCLUSION

Appendix

v1

TABLE OF APPENDICES

Document

5/19/99 Oregon Court of Appeals’ Opinion,
Kinross Copper Corp. v. State of Oregon,
981 P.2d 833 (1999)

10/13/99 Oregon Court of Appeals’ Opinion
on Reconsideration (affirming prior
decision), Kinross Copper Corp. v. State of
Oregon, 988 P.2d 400 (1999)

2/29/00 Oregon Supreme Court’s Order
Denying Review (No. S46982)

6/20/00 Oregon Supreme Court’s Order
Denying Reconsideration (No. $46982)

6/9/97 Multnomah County Circuit Court
Letter Opinion (No. 9609-06900)

6/26/97 Multnomah County Circuit Court
Order of Dismissal and Judgment
(No. 9609-06900)

Appendix

Vii

Document

11/17/99 Kinross Copper Corp.’s Petition
for Supreme Court Review

3/14/00 Kinross Copper Corp.’s Petition for
Supreme Court Reconsideration

3/27/97 Multnomah County Circuit Court
Stipulated Statement of Facts

40 C.F.R. § 440.104(b)(2)(i) (1999)
43 U.S.C.A. § 1712(c)(8) (West 1986)

Three Basin Rule, Oregon Administrative
Rule, OAR 340-041-470 (as originally
adopted)

Three Basin Rule, OAR 340-04 1-0470(1)-(7)
as amended

Vili

TABLE OF AUTHORITIES
Page
CASES
Armstrong v. United States, 364 U.S. 40 (1960) ..... 12
Atchison v. Peterson, 87 U.S. (20 Wall.) 507
SPE 2s WI eS eS Pees Cock ic 11, 13
Belk v. Meagher, 104 U.S. (14 Otto) 279 (1881) ..... 13
Benson v. City of Portland, 850 P.2d 416 (Or.
App.), rev. denied, 862 P.2d 1304 (Or.
Ph Bik ek ee ah an Gua eat dg A re a « 14
Best v. Humboldt Placer Mining Co., 371 U.S.
COREE Was COM ee aa we ee Rs 13
Boise Cascade Corp. v. State of Oregon, 991
Fae ee Oe, PA, BE oc ea ade ci ous 14
Bowles v. United States, 31 Fed. Cl. 37 (1994) ...... 19
California Coastal Comm’n v. Granite Rock
CO:, SEP US, SIC) nk ee ewes 12, 20, 21
Carson v. Hayes, 65 P. 814 (Or. 1901) ........ 13, 18
Dodd v. Hood River County, 855 P.2d 608 (Or.
le ae Gl ae eee eee oe ss le All 14
Dolan v. City of Tigard, 832 P.2d 853 (Or. App.
1992), aff'd, 854 P.2d 437 (Or. 1993),
POV GE, Sak Wes PR ob ik ee ws 14, 25

First English Evangelical Lutheran Church v.
County of Los Angeles, Cal., 482 U.S.
PE oe a a As 22

ix

Page

Florida Rock Indus., Inc. v. United States, 791

F.2d 893 (Fed. Cir. 1986), 18 F.3d 1560

ee Gl Oe a cee ee eS 20
Garbarino v. Van Cleave, 330 P.2d 28 (Or.

PE 5 eRe oe ey Sere a, ee
GTE Northwest, Inc. v. Public Util. Comm ‘n,

883 P.2d 255 (Or. App. 1994), rev'd,

900 P.2d 495 (Or. 1995), cert. denied,

DET Was RUPP OID ode vo kn wk x ov en. 14
Harbison v. City of Hillsboro, 204 P. 613 (Or.

WR dg SPOR Gia e Sic i ke es 18
Hughes v. State of Washington, 389 U.S. 290

PN ear Se he 15

Kinross Copper Corp. v. State of Oregon, 981
P.2d 833 (Or. App. 1999) .. . 1-3, 10, 11,15, 16, 19

Kinross Copper Corp. v. State of Oregon, 988
P.2d 400 (Or. App. 1999) .............. 1, 11

Lambert v. City & County, 120 S. Ct. 1549
REPRE Cy es a ae 15

Lincoln City Chamber of Commerce v. City of
Lincoln City, 991 P.2d 1080 (Or. App.
1999), petition for review denied, 330
We I ck ee nce ccc ny 14

Lucas v. South Carolina Coastal Council,
mae Um, 1005 (i9e2) 2... 5... 3, 13-16, 18, 25

Penn Central Transp. Co. v. City of New York,
og a Es: Se ic 12, 19

Page
Provolt v. Bailey, 121 P. 961 (Or. 1912) ....... 13, 18
Robinson v. Ariyoshi, 753 F.2d 1468 (9th Cir.
1985), rev'd on other grounds, 477 U.S.
OOS CER kh SW A PESO ERS 15
Skaw v. United States, 740 F.2d 932 (Fed. Cir.
1984), cert. denied, 488 U.S. 854 1988) ... 19, 20
State v. Campbell, 705 P.2d 694 (Or. 1985) ......... 2

Stevens v. City of Cannon Beach, 835 P.2d 940
(Or. App. 1992), aff'd, 854 P.2d 449 (Or. 1993),
cert. denied, 510 U.S. 1207 (1994) .......... 14

Tahoe-Sierra Preservation Council, Inc. v. Tahoe
Reg’! Planning Agency, 34 F. Supp. 2d

ee Foe SS Pe Pee eter re 25
United States v. Locke, 471 U.S. 84 (1985) ........ 13
United States v. Riverside Bayview Homes,

Bee... SPS U.S. 823 CSR sk 4s ew a 12, 19, 20, 24

STATUTES AND RULES
28 U.S.C.A. § 1257(a) (West 1993) ... 2... wees 2
53 CP. Gaeta CHRO «cas CARR Sw es 6
33 U.S.C.A. § 1341 (West 1986) ..... ooo ert. 7
33 U.S.C.A. § 1344 (West 1986 & Supp. 2000) ...... 6
36 C.F. 8 SAR. GD ck wie eee Sanita. 21

40 C.F.R. § 440.104(b)(2)(i) (1999)... 2. ee ee. 4

xi

Page
43 U.S.C.A. § 1712(c)(8) (West 1986) ......... 4, 21
Clean Water Act, 33 U.S.C.A. § 1251, et seq.
(West 1986 & Supp. 2000)................ 19
Mining and Mineral Policy Act of 1970, § 2, 30
Soe ek” 6 23
Mining Law of 1872, 30 U.S.C.A. § 22, et seq.
(West 1986 & Supp. 2000)......... 5, 12, 20, 23
Or. Admin. R. 340-041-0470(1)-(7) (2000)... 4-9, 18, 20-
22, 24
Supreme Court Rule 10%)... ................. 11
Supreme Court Rule 10(c).................... 11
U.S. Const., amend. V........... 2, 3, 9, 13, 14, 18
.m. Comet, SE. FV www www unan 2,9
aps Sree. Oa. HAV, 6-9 cca. kv vce weeaden 3
ame Geel. OM. TV, OB, ab Bo i hc ckvvveiks. 3
OTHER AUTHORITIES
2 Samuel C. Wiel, Water Rights in the Western
States § 1140 (3ded. 1911) ..............., 17

Barton H. Thompson, Jr., Judicial Takings, 76
oe St. eer 15

Xil

David J. Bederman, Zhe Curious Resurrection
of Custom: Beach Access and Judicial
Takings, 96 Colum. L. Rev. 1375 (1996) ...... 15

James P. Karp, A Private Property Duty of
Stewardship: Changing Our Land Ethic,
0 Me ee ee ree 24

Jan G. Laitos, Law of Property Rights Protection:
Limitations on Governmental Powers
§ 10.07[A] § 10.07[A][2] (Supp. 2000). .... 19, 24

Joseph Novak, The Legal Dilemma in Dewatering
Mines, 17 Rocky Mtn. Min. L. Inst. 657
EE 66 CS WRN RE ek aS 17

Michael Graf, Application of Takings Law to
the Regulation of Unpatented Mining
Claims, 24 Ecology L.Q. 57 (1997) .......... 25

]
PETITION FOR WRIT OF CERTIORARI

Petitioner Kinross Copper Corporation (“Petitioner”
or “Kinross”) respectfully petitions for a writ of certiorari
to review a judgment of the decision of the Oregon Court of
Appeals, affirming the Judgment of the Circuit Court for
Multnomah County by the Honorable Henry Kantor, Judge.

OPINIONS BELOW

The decision of the Oregon Court of Appeals of
Kinross Copper Corp. v. State of Oregon, is reported in 981
P.2d 833 (Or. App. 1999), and is reproduced as Appendix
A (“App. A”). That court’s opinion granting
reconsideration and affirming its prior decision is reported
in 988 P.2d 400 (Or. App. 1999) and is reproduced as
Appendix B (“App. B.”). The Oregon Supreme Court’s
order (SC No. $46982) denying Petitioner’s petition for
review, with two judges dissenting, is reproduced as
Appendix C (“App. C”). The Oregon Supreme Court’s
order denying Petitioner’s petition for reconsideration is
reproduced as Appendix D (“App. D”). The letter opinion
of the circuit court denying Petitioner’s motion for summary
judgment and granting the State of Oregon’s cross-motion
for summary judgment is reproduced as Appendix E
(“App. E”). The circuit court’s judgment and order of
dismissal is reproduced as Appendix F (“App. F”).

Fe

2

Petitioner’s petition seeking review by the Oregon Supreme
Court is reproduced as Appendix G (“App. G”).
Petitioner’s petition for reconsideration by the Oregon
Supreme Court is reproduced as Appendix H (“App. H”).
The stipulation of facts entered into by the parties and a part
of the record for the cross-motion for summary judgment is
reproduced as Appendix I (“App. I”).

STATEMENT OF JURISDICTION

The order of the Oregon Supreme Court denying
Petitioner’s petition for reconsideration of its refusal to
review the decision of the Oregon Court of Appeals was
entered on June 20, 2000. (App. D.) This Court has
jurisdiction in this matter pursuant to 28 U.S.C.A.

§ 1257(a) (West 1993), because the Oregon regulatory
scheme as enforced by the Oregon court is repugnant to the
Fifth and Fourteenth Amendments to the U.S. Constitution.

The Oregon Court of Appeals has held that Kinross
has no entitlement to compensation under the takings
Clauses of either the state or federal constitutions. 981 P.2d
at 834, 836. (App. A.) The court of appeals considered the
state constitutional claim first. See State v. Campbell, 705
P.2d 694, 703 (Or. 1985). Having decided the claim
adversely to Kinross, the court of appeals then had to

address and decide the federal constitutional questions,

3

which had become dispositive of the action and which are
the basis for this Court’s jurisdiction. '

CONSTITUTIONAL PROVISIONS INVOLVED

The federal constitutional provisions at issue in this
matter are the Property Clause and Fifth Amendment to the
U.S. Constitution. U.S. Const., article IV, § 3, cl. 2, of
the Property Clause provides: “Congress shall have Power
to dispose of and make all needful Rules and Regulations
respecting the Territory or other Property belonging to the
United States... .”

The Fifth Amendment provides, in pertinent part, as
follows: “[N]Jor shall private property be taken for public
use, without just compensation.” U.S. Const. amend. V.

The Fourteenth Amendment provides, in pertinent
part, as follows: “[N]or shall any State deprive any person
of life, liberty, or property, without due process of
law ....” U.S. Const., amend. XIV, § 1.

' The court of appeals concluded that a water
discharge right, and not the right to mine, is the “property”
interest in this case (981 P2d at 837). Kinross has both
rights, but complete removal of either one by state
regulation effects a justiciable taking of property. See
Lucas v. South Carolina Coastal Council, 505 U.S. 1003,
1030 (1992).

4

STATUTORY AND ADMINISTRATIVE
PROVISIONS INVOLVED

The water discharged from the mine would meet
federal and state instream water quality standards, as well as
discharge limits for mines promulgated by the U.S.
Environmental Protection Agency under the federal Clean
Water Act, see 40 C.F.R. § 440.104(b)(2)(i) (1999). “This
regulation is reproduced as Appendix J (“App J”). Federal
law allows states to impose water quality standards for
discharge on federal lands. 43 U.S.C.A. § 1712(c)(8)
(West 1986). A copy of this statute is reproduced as
Appendix K (“App. K”). However, the Oregon
administrative rule at issue, Or. Admin. R.
340-04 1-0470(1)-(7) (2000) (known informally as the
“Three Basin Rule”), prohibits all water discharges from
any industrial source, regardless of water quality, to the
North Santiam River Subbasin, in which the proposed mine
would be located. A copy of the Three Basin Rule as
originally adopted is reproduced as Appendix L
(“App. L”), and a copy of that rule as amended is
reproduced as Appendix M (“App. M”).

STATEMENT OF THE CASE
A. Procedural History.

Petitioner is the lessee of an unpatented mining
claims on U.S. Forest Service (the “USFS”) lands that were
obtained pursuant to the Mining Law of 1872, 30 U.S.C.A.
§ 22, et seq. (West 1986 & Supp. 2000). Petitioner’s lessor
in 1975 staked a number of mining claims in the Willamette
National Forest (the “WNF”), and the following year it
discovered a valuable copper (“Bornite”) deposit on some
of these claims. (App. I-1-2.) In 1977 the Oregon
Environmental Quality Commission (the “EQC”) adopted
an administrative regulation, known as the Three Basin
Rule, that prohibited all water discharges into streams
within the North Santiam, McKenzie and Clackamas River
Subbasins in western Oregon. (App. I-2.)

In June 1991, Petitioner, under its former name,
submitted a Plan of Operations for the Bornite Project (the
“Plan”) to the USFS to develop the claims. (App. I-2-3).
While the Plan was undergoing review by the USFS,
Petitioner also submitted an application to the Oregon
Department of Environmental Quality (the “~DEQ”) for a
National Pollutant Discharge Elimination System
(“NPDES”) permit that would allow the Bornite Project to
discharge groundwater pumped from the mine and other
wastewaters into a surface stream adjacent to the Bornite

6

Project. (App. I-3.) (It is stipulated that all of the waters to
be discharged from the mine would meet federal and state
water quality standards and would otherwise comply with
the federal Clean Water Act. (App. I-6.) Within the North
Santiam River Subbasin, however, the Three Basin Rule
prohibits all new industrial discharges, including discharges
from mining operations, regardless of the quality of the
water discharged. )
On April 22, 1993, the USFS Supervisor of the
WNF adopted a Record of Decision and Final
Environmental Impact Statement that approved the Bornite
Project and recognized that the mine would be required to
obtain an NPDES permit from the State of Oregon (the
“State”) to discharge mine waters into Cedar Creek, which
is adjacent to the mine site. (App. I-3.)
On May 17, 1993, the U.S. Department of the

Army, Corps of Engineers issued Petitioner a nationwide

7 permit (the “NWP”) pursuant to 33 C.F.R. part 330 (1999)
and section 404 of the Clean Water Act, 33 U.S.C.A.
§ 1344 (West 1986 & Supp. 2000), authorizing placing fill
material in two tributaries of Cedar Creek on the Bornite
Project. The NWP was issued based upon the DEQ
representation that the proposed Bornite Project would not
violate state water quality standards. The DEQ found that if
the conditions required by the Corps of Engineers were
satisfied, the Bornite Project would comply with the
requirements of the federal Clean Water Act and state water

NL ET

7

quality standards. The DEQ also issued Petitioner an
NPDES permit to discharge storm water from construction
activities at the proposed mine and had issued a certification
pursuant to section 401 of the Clean Water Act, 33
U.S.C.A. § 1341 (West 1986), that the mine would meet
state water quality standards. However, at some point the
issue was raised internally at the DEQ whether an NPDES
permit to discharge any water from the mine would violate
the Three Basin Rule, because on its face it prohibited all
discharges without regard to water quality. The DEQ then
sought an opinion from the Oregon Attorney General, who
opined that the Three Basin Rule prohibited an NPDES
permit for discharges within the three watersheds covered
by the rule. The DEQ had previously issued approximately
75 NPDES permits for facilities within the three river
basins, including the one to Petitioner for the discharge of
storm water.

By December 1993, the DEQ had determined that an
NPDES permit for the Bornite Project could be issued
under which “there would be no measurable impact on the
North Santiam River or the Little North Santiam River” but
that it was prohibited from doing so because of the Three
Basin Rule contained in Or. Admin. R. 340-041-0470(1).
(App. I-4.) The director of the DEQ advised the EQC that
Kinross required an NPDES permit in order to proceed with
the mining project but that it could not do so under a literal
reading of the Three Basin Rule. The DEQ recommended

that the EQC amend Or. Admin. R. 340-041-0470(1)
because

the [Three Basin] rule language is broad and

effectively prevents the issuance of permits

for any new facilities (including new facilities

requiring storm water permits) regardless of

the impact of the discharge. The rule may

effectively preclude development and other

activities in these areas that were not

intended to be affected by the rule.
(App. I-4-5.) The EQC was further advised that the Three
Basin Rule “prohibits development requiring a discharge
permit, regardless of the impact on water quality. No
exceptions are allowed. This rule, together with the
requirements for storm water permits, may have the effect
of precluding activities and land uses in these subbasins that
were never intended to be precluded.” (App. I-5.)

However, the EQC refused to change the Three
Basin Rule to allow the DEQ to issue NPDES permits for
new industrial waste discharges that did not adversely
impact water quality, and the DEQ ultimately denied
Petitioner’s application for an NPDES permit on March 21,
1995. (App. I-8.) The EQC did amend.the rule to allow
nonindustrial discharges. The sole ground for denial was
that Or. Admin. R. 340-041-0470(1) prohibits the issuance
of NPDES permits for new industrial discharges within the

North Santiam River Subbasin. Petitioner then took an

administrative appeal of that order to the EQC.

|

9

On August 30, 1996, the EQC issued a final order
adopting the hearings officer-recommended Findings of
Fact, Conclusions of Law and Final Order denying Kinross
an NPDES permit. (App. I-8.) The denial of an NPDES
permit by the EQC was a final administrative action that
prevented Petitioner from discharging groundwater and
other mine waters into a surface stream.

B. The Case.

In October 1996, Petitioner commenced this action
in the state circuit court alleging that the denial of the
NPDES permit violated Petitioner’s rights under the
Takings Clause of the Fifth Amendment and the Due
Process Clause of the Fourteenth Amendment because
Petitioner was prevented from developing its mining claims
as the result of the administrative denial and was thus
denied all economically viable use of those claims. In a
second count, Petitioner alleged that the Three Basin Rule
did not substantially advance any legitimate state interest.
Based on the stipulation of facts (App. I), the circuit court
granted the state’s summary judgment and dismissed
Petitioner’s claims (App. E, F).

On appeal, the Oregon Court of Appeals affirmed

the circuit court’s dismissal of the case on the basis (1) that
the denial of the NPDES permit did not deny Petitioner the
right to mine its claims, but only denied it the right to

10

discharge water (even though it is a stipulated fact that
because of heavy precipitation and high volumes of
groundwater, the mine could not operate without an NPDES
permit), and (2) that because it was never a part of
Petitioner’s bundle of property rights to appropriate water
for the mine, Petitioner never had a right to discharge water
from the mine; therefore, denying it an NPDES permit did
not “take” anything. (App. A.) The Petitioner moved the
court of appeals for reconsideration, which was granted, but
the opinion was adhered to. (App. B.) Petitioner then
petitioned for review by the Oregon Supreme Court, which
was denied, with two justices dissenting. (App. C, G.) It
then petitioned for reconsideration by that court, which was
also denied. (App. D, H.)

The trial court decided the motion for summary
judgment based on a theory that had not been argued by the
state. 981 P.2d at 835-36. The court of appeals based its
opinion on a different theory, i.e., that Petitioner did not
have the right to appropriate water for the mine as a part of
its bundle of property rights, therefore the state could
prevent it from discharging any mine waters without it
constituting a taking of Petitioner’s mining rights. This was
a theory the state had also not argued before the court of
appeals. /d. at 837. Further, the court of appeals was
disingenuous in its opinion on reconsideration by stating
that Petitioner had not contended that it had a common-law
right to discharge nonpolluting mine waters when the matter

11

was originally before that court. 988 P.2d at 401. In both
its opening and reply briefs Petitioner had cited to

Atchison v. Peterson, 87 U.S. (20 Wall.) 507, 514-15
(1874), for the proposition that a miner had a common-law
right to discharge mine water and that it had never been
considered to be a nuisance to discharge such waters, even
if it had some adverse impacts on downstream users.
Appellant’s Opening Brief at 18; Appellant’s Reply Brief at
8. The court cited, but glossed over discussing, Atchison in
its original opinion. 981 P.2d at 838.

REASONS FOR GRANTING THE PETITION

Supreme Court Rule 10(b) lists among the
considerations governing review on certiorari the
circumstance in which a state court of last resort has
decided a federal question in a way that conflicts with the
decision of a federal court of appeals. In this case the
decision was rendered by a lower appellate court and the
state court of last resort twice refused to grant review.
(App. C, D.) Under Rule 10(c), a ground for review exists
when a state court has decided an important question of
federal law that has not been, but should be, settled by this
Court or has decided a federal question in a way that
conflicts with applicable decisions of this Court. Both of
these grounds for review are present in this case.

12

I. This Case Involves Four Important Constitutional
Questions That Should Be Resolved by This
Court.

The precedent established by the decision below
opens the door wide to allow states to prevent mining on
federal lands by simply denying the miner the right to
discharge nonpolluting groundwaters and at the same time
avoid having to pay just compensation for “taking” those
mining claims. It also serves as a precedent for Claiming
that no taking occurs unless the very thing proscribed by
government is identical to the property interest in question.
This is directly contrary to this Court’s position in United
States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 127
(1985), that it is “the effect of the denial” that gives rise to
a taking. The issue is one of causation. Armstrong v.
United States, 364 U.S. 40, 48 (1960); Penn Central
Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978)
(“whether a particular restriction will be rendered invalid
by the government’s failure to pay for any losses
proximately caused by it depends,” etc. (emphasis added)).

As will also be discussed below, if left to stand, a
State will be able to use an environmental law to trump the
federal Mining Law of 1872 by simply refusing to issue a
water discharge permit. California Coastal Comm’n y.
Granite Rock Co., 480 U.S. 572 (1987).

This Court has long recognized that an unpatented
mining claim is an interest in real property protected by the

13

Fifth Amendment to the U.S. Constitution that vests upon
discovery of a valuable mineral deposit. Belk v. Meagher,
104 U.S. (14 Otto) 279, 283 (1881). Moreover, an
unpatented mining claim is a property interest that, if taken
by a government action, entitles the miner to just
compensation for that interest. United States v. Locke, 471
U.S. 84, 86 (1985); Best v. Humboldt Placer Mining Co.,
371 U.S. 334, 335 (1963). Because the holder of an
unpatented mining claim only has a property right to
remove minerals, if it is prevented from mining, the claim
holder is denied all economically productive use of its
property. Lucas, 505 U.S. 1003.

Under Lucas, the state can only deny a property
Owner just compensation if the proscribed use would have
been a public or private nuisance at common law. /d. at
1030.* The right of a miner to discharge nonpolluting mine
waters from unpatented mining claims on federal lands
predates statehood. Atchison, 87 U.S. (20 Wall.) 507.
Further, the Oregon courts have also long recognized that
the discharge of nonpolluting mine waters to a stream is not
a common-law nuisance. Provolt v. Bailey, 121 P. 961 (Or.
1912); Carson v. Hayes, 65 P. 814 (Or. 1901).

* No taking occurs if “[t]he use of these properties
for what are now expressly prohibited purposes [e.¢.,
discharge of groundwater] was always unlawful... .” 505
U.S. at 1030 (emphasis in original). Here, the discharge
from unpatented mining claims was always /awful.

14

The opinion below is a part of a growing number of
state law cases that seek to circumvent this Court’s decision
in Lucas by redefining the property right in question to say
that it was not a part of the landowner’s property interest to
begin with, rather than determining whether the proposed
action could have been enjoined as a common-law public or
private nuisance. The Oregon appellate courts have
consistently displayed hostility to this Court’s Fifth
Amendment takings jurisprudence by construing this
Court’s opinions as narrowly as possible, misconstruing
them or circumventing them by reinterpreting the state’s
property law. Dolan v. City of Tigard, 832 P.2d 853, 855
(Or. App. 1992), aff'd, 854 P.2d 437 (Or. 1993), rev'd,
512 U.S. 374 (1994); Stevens v. City of Cannon Beach, 835
P.2d 940, 942 (Or. App. 1992), aff’d, 854 P.2d 449, 452-
57 (Or. 1993), cert. denied, 510 U.S. 1207 (1994) (Scalia
and O’Connor, JJ., dissenting); Dodd v. Hood River
County, 855 P.2d 608, 614-15 (Or. 1993); GTE Northwest,
Inc. v. Public Util. Comm’n, 883 P.2d 255, 257-59 (Or.
App. 1994), rev'd, 900 P.2d 495, 501-04 (Or. 1995), cert.
denied, 517 U.S. 1155 (1996); Benson v. City of Portland,
850 P.2d 416, 418-20, 425-26 (Or. App.), rev. denied, 862
P.2d 1304 (Or. 1993); Boise Cascade Corp. v. State of
Oregon, 991 P.2d 563, 569-70 (Or. App. 1999) (petition
for review by Oregon Supreme Court pending); Lincoln
City Chamber of Commerce v. City of Lincoln City, 991
P.2d 1080 (Or. App. 1999), petition for review denied, 330

15

Or. 331 (Or. 2000); David J. Bederman, The Curious
Resurrection of Custom: Beach Access and Judicial
Takings, 96 Colum. L. Rev. 1375, 1438-42 (1996). Recent
opinions by state courts circumventing this Court’s takings
jurisprudence is not limited to Oregon. Lambert v. City &
County, 120 S. Ct. 1549 (2000) (Scalia, Kennedy and
Thomas, JJ., dissenting from denial of certiorari).

State courts reinterpreting their property law in
order to avoid a taking also presents the issue of judicial
takings. Hughes v. State of Washington, 389 U.S. 290,
296-97 (1967) (Stewart, J., concurring); Barton H.
Thompson, Jr., Judicial Takings, 76 Va. L. Rev. 1449
(1990): see also Robinson v. Ariyoshi, 753 F.2d 1468 (9th
Cir. 1985), rev’d on other grounds, 477 U.S. 902 (1986).

Il. The Petition Should Be Granted Because the
Decision Below Conflicts with Decisions of This
Court and Other Federal Courts.

The decision of the Oregon Court of Appeals, which
the Oregon Supreme Court twice declined to review,
subverts this Court’s language in Lucas that no taking
occurs “‘if the logically antecedent inquiry into the nature
of the owner’s estate shows that the proscribed use interests
were not part of his title to begin with.’” 981 P.2d at 837
(quoting Lucas, 505 U.S. at 1027).

The proscribed use in this case is the discharge of
nonpolluting mine waters into a surface stream. The test in

16

Lucas is whether the proscribed use could be enjoined as a
common law public or private nuisance. If not, and if as a
result the owner is prohibited from making any
economically viable or productive use of his or her
property, he or she is entitled to compensation for a taking.

Instead of focusing upon whether the discharge of
nonpolluting mine water could be enjoined as a common
law nuisance, the court of appeals held that there had been
no taking because Petitioner’s property interest in the
mining claims did not include the right to appropriate water
for a beneficial use under Oregon law. /d. at 839-40. The
court’s analysis is seriously flawed for a number of reasons.
First, it is undisputed that Petitioner has the right to use up
to 5,000 gallons of water per day without seeking an
appropriation under Oregon law. Jd. at 840. Second, there
is no evidence that Petitioner could not obtain an
appropriation for water in excess of that amount, if it
needed one. However, an appropriation of water is not the
issue. The issue is the discharge of excess water, which has
always been governed by a different set of rules from water
appropriations.

An article on mine dewatering describes the
distinctions as follows:

The legal principles applicable to
mine dewatering cases are dependent initially
at least upon whether there are competing
claims to the proprietary use of the
percolating waters. If the interceptor asserts
a proprietary claim to such waters as against

17

other proprietors or appropriators, the rules
governing water rights will apply. If,
however, the interceptor disclaims any
interest in the waters and discharges the same
solely for the purpose of ridding the mine
workings of such waters, the rules governing
the use of one’s property will apply... .

The [latter] has been referred to as a
“drainage case” and the [former] a “water
ct.

Joseph Novak, The Legal Dilemma in Dewatering Mines,
17 Rocky Mtn. Min. L. Inst. 657, 665 (1972) (citation
omitted).

This distinction applies in Oregon. Under Oregon
common law, and consistent with the common law of all
other state jurisdictions, Petitioner holds a right to drain
water from its property. The principle was explained by an
early commentator as follows: “The reasonable use being
use of land (and not necessarily of water if the land may be
used without the water), then drainage is a proper purpose
and a reasonable use of land where the land is thereby
benefited.” 2 Samuel C. Wiel, Water Rights in the Western
States § 1140, at 1067 (3d ed. 1911) (emphasis added). The
Oregon Supreme Court interpreted the rule to apply as
follows:

The rule that would best serve in this state,
and tend to promote the interest of the people
without causing undue hardship, would be to
allow the owner of land to turn upon the land
of an adjacent owner surface water in such
quantities as would naturally drain in that
direction by means of artificial drainage even

18

though the flow of such water upon the lower

tract is accelerated; due regard being

observed for the interest of the adjacent

owner so as to cause no unreasonable

inconvenience.
Harbison v. City of Hillsboro, 204 P. 613, 618-19 (Or.
1922).

The Oregon Supreme Court reaffirmed the foregoing
rule in Garbarino v. Van Cleave, 330 P.2d 28 (Or. 1958).
The state stipuiated in this case that Petitioner’s drainage of
water from its property would not result in any measurable
pollution (App. I-6), so the proposed discharge clearly
meets the common law test in that it will “‘cause no
unreasonable inconvenience’” to any other landowner.
330 P.2d at 30 (citation omitted). Accordingly, Petitioner,
as a-part of its property interest in unpatented mining
claims, does have a common-law right of drainage that has
been “taken” by imposition of the Three Basin Rule.
Accord Provolt, 121 P. 961; Carson, 65 P. 814. An
unpatented mining claim can only be used for one purpose;
the state’s denial of an NPDES permit has deprived the
unpatented claims of all economically productive use as a
mine, which constitutes a taking entitling Petitioner to just
compensation under the Fifth Amendment. Lucas, 505
U.S. at 1027.

The second important issue that this Court needs to

address is causation. The court below also took the position
that there had been no taking because the subject rule

19

merely proscribed the discharge of mine waters but did not
prohibit mining. 981 P.2d at 837. (It isa stipulated fact
that the mine would have to discharge excess groundwater
in order to operate (App. I-3).) That position is in conflict
with thi: Court’s opinion in Riverside Bayview, 474 U.S.
121. In that case, the landowner had been denied a permit
under the Clean Water Act, 33 U.S.C.A. § 1251, ef Seq.
(West 1986 & Supp. 2000), to fill in wetlands, and
therefore it claimed a taking of its property. This Court
Stated: “Whether the denial of a permit would constitute a
taking in any given case would depend upon the effect of the
denial on the owner’s ability to put the property to —
productive use.” Riverside Bayview, 474 U.S. at 127 n.4
(emphasis added); see also Penn Central, 438 U.S. at 124
(“proximately caused”); Bowles v. United States, 31 Fed.
Cl. 37, 49 (1994) (“but for” test); Jan G. Laitos, Law of
Property Rights Protection: Limitations on Governmental
Powers § 10.07[A], at 10-44 & § 10.07[A][2], at 10-48
(Supp. 2000).
This case also conflicts with two opinions of the
U.S. Court of Appeals for the Federal Circuit. Skaw v.
United States, 740 F.2d 932 (Fed. Cir. 1984), cert. denied,
488 U.S. 854 (1988), also involved unpatented mining
claims on federal lands. In Skaw, the Federal Circuit held
that because the newly enacted Wild and Scenic Rivers Act
prevented mining along the St. Joe River in Idaho, miners
with valid unpatented mining claims would be entitled to

20

just compensation for a regulatory taking based on the Fifth
Amendment. Florida Rock Indus., Inc. v. United States,
791 F.2d 893 (Fed. Cir. 1986), 18 F.3d 1560 (Fed. Cir.
1994), is even more analogous to the present case. As in
Riverside Bayview, the plaintiff in Florida Rock had been
denied a Clean Water Act permit, which prevented it from
mining limestone because removal of the rock left a hole in
wetlands that filled with water causing “temporary pollution
by turbidity which, however, would not be a menace to the
drinking water.” 791 F.2d at 895-96. The Federal Circuit
held in the second appeal that a taking of the quarry
property was caused by the Corp of Engineers’ refusal to
issue the permit. 18 F.3d at 1573. As in this case, the
denial of a water pollution permit did not prevent the
plaintiff in Florida Rock from mining, but it was not
feasible to mine its property without one.

Riverside Bayview, Skaw and Florida Rock were all
_ brought to the attention of both the Oregon Court of
Appeals and the Oregon Supreme Court to no avail. The
court of appeals ignored discussing them, and the Oregon

Supreme Court refused to grant review.

A third important issue involves whether the federal
Mining Law of 1872 preempts enforcement of the Three
Basin Rule. This Court’s opinion in Granite Rock, 480
U.S. at 580, 583, 593, involved a facial challenge to a state
environmentai law that imposed a state permit requirement
on the operation of unpatented mining claims on federal

21

lands. In holding that the state law on its face was not
preempted, this Court went on to state: “The line between
environmental regulation and land use planning will not
always be bright; for example, one may hypothesize a state
environmental regulation so severe that a particular land use
would become commercially impracticable.” Jd. at 587.

While the USFS requires miners within national
forests to comply with state water quality standards, neither
by statute nor regulation does federal law allow states to
prohibit outright any water discharge from mining claims on
federal lands. 43 U.S.C.A. § 1712(c)(8) (App. K); 36
C.F.R. § 228.8(b) (1999). Unlike Granite Rock, this case
involves a prohibition that prevents mining of unpatented
claims on federal lands; the Three Basin Rule not only
makes mining “commercially impracticable,” it makes it
physically impossible. Such a prohibition is preempted by
federal law.

Further, when the Three Basin Rule was amended
shortly before the EQC issued its final order denying
Petitioner an NPDES permit, it ceased to be an
- environmental rule and became a land use regulation. The
amended Three Basin Rule proscribes new NPDES
wastewater discharge permits for industrial applicants, but it
expressly allows a number of other wastewater discharges, ©

many of which may have substantial adverse effects on
water quality. Nonetheless, the rule absolutely forbids
wastewater discharges from Petitioner’s mine, even though

te

it is stipulated that those discharges would meet state and
federal instream water quality standards and other
requirements under the federal Clean Water Act. It is only
because the mine happens to lie within the North Santiam
River Subbasin, one of the three basins subject to the Three
Basin Rule, that DEQ refused to issue an NPDES permit for
discharges from the mine.

Because the Three Basin Rule is preempted by
federal law, Petitioner is entitled to compensation for a

temporary taking under First English Evangelical Lutheran
Church v. County of Los Angeles, Cal. , 482 U.S. 304
(1987).

23
CONCLUSION

Mining in the western United States has played a
major role since the earliest days of settlement. Congress
enacted the Mining Law of 1872 to encourage the
development of minerals on public lands. The right to
discharge nonpolluting mine waters has always been a part
of a miner’s property interest in unpatented mining claims,
and from the earliest days it has never been considered
either a public or private nuisance to do so. The lower
courts’ holding that a property owner must have an
appropriation right in order to discharge excess water is of
special importance in the western United States and
inconsistent with more than 150 years of water law in those
States.

In enacting the Mining and Mineral Policy Act of
1970, § 2, 30 U.S.C.A. § 21a (West 1986), Congress
emphasized that an “economically sound and stable
domestic . . . industr[y]” is important to both our economy
and national security. -A state should not be allowed to
thwart that policy with impunity by preventing the discharge
of nonpolluting waters from mining claims on federal lands
and not having to pay just compensation for the minerals
that cannot be mined.

This case is closely watched by the mining industry
and other property owners that must be able to discharge

excess groundwater in order to put their land to a beneficial

24

use. The precedent established by the Oregon courts that
the state can stop all productive use of lands by simply
denying the right to discharge nonpolluting waters into a
stream can have very wide ramifications. Nor is the issue
limited to the western United States. If there is no right to
discharge nonpolluting waters, and the courts can disregard
_ the nuisance issue, then cases such as Riverside Bayview
involving the draining of wetlands also come into question.
See Laitos, supra, § 8.02[E], at 8-23 to 8-24 (Supp. 2000).
A vocal segment of the population has become
increasingly active in trying to stop all commercial activities
on federal forest lands through the use of state regulations.
The unwillingness of the EQC in this case to amend the
Three Basin Rule to allow nonpolluting water discharges,
while changing the rule to allow discharges from
nonindustrial sources, is just one example of their efforts.
That segment views mining, grazing and logging, all of
which Congress has authorized can be done on federal
__ forest lands, as harmful to nature. As one law professor has
stated: “The natural systems upon which we as a
community rely for survival must be protected, and if
private property rights must be sacrificed to achieve that
protection, so be it.’ James P. Karp, A Private Property
Duty of Stewardship: Changing Our Land Ethic, 23 Envtl.
L. 735, 737 (1993). That is also the view of the author of
the article that the trial court relied upon in granting the
State summary judgment and dismissing this case, which

25

even the state conceded and the court of appeals recognized
was “at odds with ‘traditional takings analysis.’” 981 P.2d
at 836; see Michael Graf, Application of T: akings Law to the -
Regulation of Unpatented Mining Claims, 24 Ecology L.Q.
57 (1997).

In reversing the Oregon appellate courts in Dolan,
this Court had to remind them that “the Takings Clause of
the Fifth Amendment [is] as much a part of the Bill of
Rights as the First Amendment or Fourth
Amendment... .” 512 U.S. at 392. Unfortunately it is a
lesson the Oregon courts have not heeded. They and many
other lower courts have been quick to take the words of this
Court in Lucas “that the proscribed use interests were not
part of his title to begin with” as creating new avenues for
avoiding a taking, rather than analyzing whether the
proscribed use was a common-law nuisance. 505 U.S. at
1027; see Tahoe-Sierra Preservation Council, Inc. v. Tahoe
Reg’! Planning Agency, 34 F. Supp. 2d 1226, 1251 (D.
Nev. 1999). This Court needs to refocus all of the lower
courts on the fact that if the proscribed use was not a
common-law nuisance, the owner is entitled to
compensation if he or she has been denied all economically
productive use of his or her property interest.

26

Petitioner respectfully urges the Court to grant the
Petition for Writ of Certiorari.

Dated this 14th day of

Jerry R.’Fish
Michael R. Campbell
David E. Van’t Hof
James N. Westwood
*Counsel of Record

STOEL RIVES up

900 SW Fifth Avenue, Suite 2600
Portland, OR 97204-1268

(503) 294-9376

Of Attorneys for Petitioner Kinross
Copper Corporation

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1591%3A1. Public record. Not legal advice.