The Wilderness Society, and Great Bear Foundation, Non-Profit Corporations v. Michael Dombeck, in His Official Capacity as Chief, United States Forest Service David F. Jolly, in His Official Capacity as Regional Forester, Northern Region Robert L. Schrenk, in His Official Capacity as Supervisor, Kootenai National Forest United States Forest Service, an Agency of the United States and Noranda Minerals Corp., a Delaware Corporation and Wholly-Owned Subsidiary of Noranda, Inc., a Canadian Corporation
Docket: 97-35954
Court: Court of Appeals for the Ninth Circuit; February 15, 1999; Federal Appellate Court
The case centers on a legal challenge by The Wilderness Society and Great Bear Foundation against several federal officials and Noranda Minerals Corp. regarding the validity of two mining claims (HR 133 and 134) located in the Montanore Deposit within the Cabinet Mountains Wilderness Area in Montana. The Wilderness Area, part of the Kaniksu National Forest, has a history of mineral exploration dating back to 1971 when Pacific Coast Mines, Inc., Noranda's predecessor, began searching for silver and copper.
Borax, the predecessor company, staked initial claims in 1982 and subsequently discovered the mineralized Montanore Deposit. The Forest Service initially allowed limited exploratory drilling, determining in 1985 that four of Borax's claims had valid existing rights. However, in January 1988, Borax abandoned two of those claims. In 1991, Noranda applied for a mineral patent for claims HR 133 and 134, prompting TWS to file a protest against the validity of these claims. The Bureau of Land Management (BLM) sought the Forest Service's input on the patent application, which, in June 1993, concluded Noranda possessed valid mining rights for HRs 133 and 134. The case was decided by the Ninth Circuit Court of Appeals, following submission on January 5, 1999, and a decision on February 16, 1999.
On May 24, 1991, TWS initiated legal action against Noranda and the Forest Service, contesting the 1985 determination that Noranda's mining claims, HR 133 and 134, were valid. During the proceedings, the Forest Service approved Noranda's patent application for special use permits for claim development. TWS's subsequent administrative appeals regarding the permits were denied on August 24, 1994. TWS then amended its complaint, alleging violations of the Wilderness Act by the Forest Service, specifically arguing that: (1) the claims were improperly deemed valid under state law; (2) Noranda's extralateral mineral rights were extinguished by a 1983 wilderness area withdrawal; (3) reliance on post-withdrawal drilling data was improper; and (4) there was inadequate analysis of the mineral deposits in the claims.
On August 13, 1997, the district court denied TWS's summary judgment motions, excluded the testimony of TWS's expert, Dr. W. Goerold, and granted summary judgment to the government and Noranda. TWS filed a notice of appeal on October 8, 1997. The court determined that state mining law governs the location of mining claims, as long as it does not contradict federal law. The Forest Service's assessment of Noranda's claims was upheld by the district court.
TWS contested the deference given to the Forest Service’s interpretation of Montana law, but the analyses were consistent with a de novo interpretation. TWS argued that claims HR 133 and 134 were invalid as they did not constitute legal relocations of senior claims. The district court found that under Montana law, a claim does not lose its validity upon relocation, as long as the original claim is not abandoned or extinguished. Mont. Code Ann. 82-2-109 supports that amendments or relocations do not waive acquired rights, allowing claimants to maintain rights from prior claims.
TWS interprets the statute 82-2-109 as indicating that the original claim is lost and replaced upon relocation. TWS argues that since Borax maintained the original claims until their abandonment in 1988, the relocation must be void. However, a straightforward reading of 82-2-109 indicates that the statute merely contracts the boundaries of a senior claim to exclude areas beyond the junior claim's boundaries. The subsequent sentence clarifies that a locator can rely on either the original or relocated claim when determining overlapping areas. TWS contends that the relationship between 82-2-109 and 82-2-108 suggests a requirement for the original claim's abandonment during relocation. Section 82-2-108 allows claim owners to relocate their claims but mandates compliance with original location requirements, implying that the discovery point must be on unappropriated ground. TWS argues that since the discovery points of claims HRs 133 and 134 are within HR 74's boundaries, HRs 133 and 134 can only be valid if HR 74 was abandoned at relocation time. However, the statutes do not prevent an owner from placing a discovery point of a relocated claim within their original claim's boundaries. TWS cites Montana case law, particularly Lehman v. Sutter, to support its claim that a relocation indicates abandonment of the original claim. In Lehman, the court ruled the Sutter relocations invalid because the original claims were still occupied by Wegner. The court's conflicting statements about abandonment and forfeiture do not serve as binding precedent, as the reference to abandonment was not essential to the ruling.
In Tiggeman v. Mrzlak, 40 Mont. 19, 105 P. 77 (1909), a claim discovered within the boundaries of a pre-existing claim is deemed void, even when held by the same miner. However, the district court determined that this case was not determinative because the Montana Supreme Court later ruled that the Gold Star claim, despite overlapping with the Walstadde claim, was the senior claim due to its discovery monument's placement. Consequently, the previously established rule regarding void claims became dicta. Additionally, in Harvey v. Havener, 135 Mont. 437, 340 P.2d 1084 (1959), the Supreme Court affirmed that a relocated claim's discovery point can fall within the boundaries of an original claim if held by the same claimant, noting that failure to record a mining claim does not negate ownership against subsequent claimants with notice. TWS argues that the Harvey decision does not support the validity of holding both original and relocated claims, but this interpretation conflicts with the ruling that the original claims were not invalidated by the overlapping relocated claim. Moreover, the respondents in Harvey indicated no intent to abandon their original claims, further supporting their rights. Ultimately, Montana's statutes do not prevent a claimant from placing a discovery point for a relocated claim within their original claim's boundaries, and the district court's interpretation aligns with Montana law. TWS also contests the district court's finding that the 1872 Mining Law, 30 U.S.C. § 26, allows extralateral rights for Noranda's claims, which will undergo de novo review.
TWS argues that the General Mining Law and subsequent legislation eliminated extralateral rights for mineral claims within national forests, despite these forests being open to mining. TWS distinguishes between two types of land under the General Mining Law of 1872, asserting that 30 U.S.C. 22 grants only common law ownership rights to minerals, while 30 U.S.C. 26 confers exclusive rights to surface and intraliminal minerals, as well as extralateral rights. TWS cites Cotton Petroleum Corp. v. New Mexico to support its position. In contrast, Noranda and the government maintain that sections 22 and 26 address different aspects of mining rights applicable to all locations, not different types of land. They emphasize that section 22 is a general provision for claiming mineral deposits on U.S. lands, while section 26 pertains to rights associated with discovered lode deposits. Noranda further points out that national forests were established long after the General Mining Law was enacted, suggesting no intention from Congress to create separate rules for lode deposits in these areas. They argue that both sections support the view that extralateral rights are applicable to national forest lands, referencing the vague use of "public domain" by Congress, which at times includes national forests. Finally, they argue that it would be unreasonable for Congress to exclude extralateral rights from mineral claims in national forests without a clear policy rationale.
TWS's argument referencing Cotton Petroleum is misapplied. In Cotton Petroleum, the Supreme Court examined whether New Mexico could tax oil and gas production from Indian land leases held by a non-Indian entity. Cotton Petroleum claimed that the Indian Mineral Leasing Act of 1938 aimed to ensure Indian tribes received maximum returns on mineral leases, arguing that state taxes interfered with this federal policy. The Court concluded that the Act's purpose was to alleviate disadvantages in leasing mineral rights on Indian lands, not to extend similar considerations to claims on public lands or national forest lands, which were not part of the case. Consequently, TWS's assertion that Cotton Petroleum supports a distinction between leases on Indian lands and those on national forest lands is unfounded, as the Act governing leases on Indian lands does not specifically apply to claims under the General Mining Law.
The Organic Act of 1897 reopened national forests to mineral entry, stating that these lands are subject to the existing mining laws of the United States, including rights under 30 U.S.C. 26 for extralateral claims. Federal courts and BLM regulations support that extralateral rights apply to claims in national forests. TWS's reliance on the Wilderness Act of 1964, specifically Section 4(d)(3), arguing that it limits rights to minerals "within the claim" and excludes extralateral rights, lacks supporting authority and has been rejected by the Forest Service.
Ultimately, TWS failed to demonstrate that the district court erred in finding that the Forest Service reasonably determined that extralateral rights apply in national forests. TWS also contended that the district court incorrectly upheld the Forest Service's finding that Noranda discovered valuable mineral deposits on claims HR 133 and 134 prior to the wilderness area withdrawal. The agency's decision is only reversible if proven arbitrary or not in accordance with the law, and the court will defer to the agency's expertise in determining what constitutes a discovery.
The Wilderness Act of 1964 permits mineral exploration in designated wilderness areas for twenty years, after which minerals are withdrawn unless valid claims exist. To continue mining post-expiration, a claim must demonstrate the discovery of a valuable mineral deposit. This requires physical exposure of a vein or lode and sufficient evidence regarding the quality and quantity of the mineral to justify mine development. Discoveries must be assessed based on conditions at the time of withdrawal, with geologic inference used to predict mineralization beyond sampled areas.
TWS contends that the district court erred in upholding the Forest Service's determination of valid existing rights for Noranda, arguing it relied on post-withdrawal data and lacked adequate geologic inference. TWS points to Noranda's pre-withdrawal data, which included surface samples from an outcrop and drill holes that either intercepted ore-grade mineralization or did not. TWS claims the Forest Service improperly used data from drill holes deepened or drilled after the withdrawal. The district court found that the Forest Service could conclude, based solely on pre-withdrawal information, that a valuable copper-silver deposit existed at the time of withdrawal.
While both parties agree that post-withdrawal data can confirm a discovery established with pre-withdrawal data, TWS argues that mere mineral exposure is insufficient to prove a valuable deposit. The Forest Service maintained that pre-withdrawal data supported critical findings about the Montanore mineral deposit, including its dimensions, orientation, and quality, thereby establishing the necessary discovery criteria.
The Forest Service inferred that the Montanore Deposit extended approximately 5,600 feet northwest toward St. Paul Pass based on comprehensive geological mapping, nearby deposit information, and relevant scientific literature. TWS contested the validity of the Forest Service's "geologic inference," noting the necessity for structural evidence to justify mining efforts. The district court identified five key geological characteristics supporting the Forest Service's inference: (1) similarities between the Montanore Deposit and other local copper-silver deposits; (2) significant continuous mineralization with substantial stratigraphic thickness found before the withdrawal; (3) confirmed continuous mineralization for 300 feet along the deposit's underground dip; (4) surface samples indicating copper-silver mineralization at various distances northwest of the outcrop; and (5) evidence from pre-withdrawal drilling showing mineralization patterns consistent with known deposits in the region. TWS argued that surface sampling alone cannot support subsurface deposit inferences; however, the Forest Service's conclusions were based on multiple data sources, including drill holes and geological insights from nearby mines. While two drill holes failed to find ore-grade mineralization, one revealed significant mineralization linked to minable ore. The Forest Service conservatively projected the deposit's extent based on the evidence reviewed. The district court upheld the exclusion of Dr. W. Thomas Goerold's declarations from the administrative record, affirming that review is restricted to the agency's original record at the time of decision-making, and that these declarations were not submitted during the necessary appeals process. The court's decision was affirmed by Judge Lloyd D. George.
