Bedroc Limited, L.L.C., a Nevada Limited Liability Company, Plaintiff-Counter-Defendant-Appellant, and Western Elite, Inc., a Nevada Corporation, and Earl Williams, an Individual, Plaintiff-Counter-Defendant v. The United States of America Gale A. Norton, Secretary of the Interior United States Department of the Interior, Bureau of Land Management and Curtis L. Tucker, Area Manager, Caliente Resource Area Bureau of Land Management, Defendants-Counterclaimants-Appellees
Docket: 01-17080
Court: Court of Appeals for the Ninth Circuit; December 29, 2002; Federal Appellate Court
BedRoc Limited, a Nevada LLC, and other plaintiffs appealed a decision from the United States District Court concerning the interpretation of the Pittman Underground Water Act. The central issue was whether sand and gravel qualify as "valuable minerals" under the Act, which reserved such minerals to the United States when granting land patents for underground water discovery in Nevada. BedRoc argued that sand and gravel should not fall under this category, while the United States claimed ownership based on the mineral reservation. The district court ruled in favor of the United States, and the Ninth Circuit affirmed, concluding that sand and gravel are included in the "valuable minerals" reservation. The court based its decision on the Act's purpose, legislative history, and contemporaneous government documents indicating a lucrative market for sand and gravel at the time of the statute's enactment. The Pittman Act, passed in 1919, was designed to incentivize the discovery of underground water to promote agricultural development in Nevada, which faced challenges due to its arid landscape and sparse population.
The Act stipulates that all patents issued under its provisions include a reservation of all coal and valuable minerals for the United States, along with the right to prospect, mine, and remove these resources, governed by current coal and mineral land laws. On March 12, 1940, Newton and Mabel Butler received a patent for 560 acres in Lincoln County, Nevada, which reserved these rights to the United States. In the early 1990s, Earl Williams, who purchased the property in 1993, was issued trespass notices by the Bureau of Land Management (BLM) for extracting sand and gravel, which the BLM determined violated the government's reserved mineral interests. The Interior Board of Land Appeals upheld the BLM's decision, referencing congressional intent.
BedRoc acquired the property from Williams in 1995 and continued the extraction, placing proceeds from sales in escrow pending resolution of ownership disputes. BedRoc then sought to quiet title to the sand and gravel in district court, leading to cross-motions for summary judgment where the court ruled in favor of the United States. Before final resolution of the case, the parties settled the escrow funds issue, allowing BedRoc to appeal solely on ownership matters. The district court then issued a final judgment based on the settlement.
The appellate court will review the summary judgment de novo, focusing on statutory interpretation and Congressional intent. It emphasizes that understanding the term "mineral" can vary based on context, and dictionary definitions may not fully clarify its meaning in legal cases.
A "mineral" is defined broadly to encompass non-animal and non-vegetable substances, with some dictionaries specifically mentioning "sand" as a mineral. However, neither statutory language nor dictionary definitions clarify whether Congress intended to include sand and gravel in the "valuable minerals" reservation under the Pittman Act. The term "valuable" does not definitively indicate the inclusion or exclusion of these materials, as it historically signified utility rather than mere preciousness. While "valuable minerals" does not typically invoke images of sand and gravel, these substances possess commercial worth and usefulness.
The Pittman Act references minerals multiple times, using "valuable" in some instances but not in others, suggesting that the qualifier may not significantly limit the scope of the mineral reservation. The Act also requires that land granted must be certified as "nonmineral," leading to conflicting interpretations: BedRoc contends this means the government believed the land contained no minerals, while the government argues it intended to reserve all mineral rights by designating these lands as "nonmineral." Consequently, the phrase "valuable minerals" is deemed ambiguous, lacking conclusive evidence of Congressional intent regarding the inclusion of sand and gravel. Further examination of the statute's purpose, legislative history, and external sources is necessary to ascertain Congressional intent.
The Act's primary objective is to promote the exploration and development of artesian and subsurface waters in Nevada, as outlined in committee reports. It aimed to utilize discovered water for irrigating agricultural lands, incentivizing private individuals to invest in water prospecting. The requirement for obtaining a patent included demonstrating sufficient underground water to profitably irrigate at least twenty acres of land. The Act's overarching goal was to foster agricultural development in areas lacking surface water sources, as evidenced by multiple legislative references emphasizing the importance of artesian water for Nevada's agricultural future.
The Act also implied a reservation of mineral rights for other uses, aligning with the policy at the time of its passage. Historical context reveals that prior to 1909, public lands were categorized as either mineral or nonmineral, leading to inefficiencies. President Theodore Roosevelt advocated for a system allowing separate rights for agricultural and mineral uses, facilitating their independent development and better serving public needs.
In *Watt v. Western Nuclear, Inc.*, the Supreme Court examined legislative history related to the Stock-Raising Homestead Act (SRHA) and concluded that gravel was reserved to the United States in land grants made under the Act. The Court emphasized the agricultural intent behind the SRHA, asserting that the classification of a substance as part of the surface or mineral estate should reflect Congress's vision for surface estate use. The Court cautioned that interpreting the SRHA to grant gravel deposits to farmers would imply Congress aimed to make mineral exploitation reliant solely on the initiative of those with agricultural interests.
The Court aligned its reasoning with the precedent set in *Union Oil*, advocating for a broad interpretation of mineral reservations in light of the agricultural objectives of the grants and Congress's intent to retain subsurface resources for separate management. The SRHA was enacted in 1916, shortly before the Pittman Act, and discussions during the Pittman Act's debates indicated a parallel intention regarding mineral reservations.
Congressional records revealed that the mineral reservation was a result of a legislative compromise vital for the bill's passage. During the debates, Senator Thomas proposed removing the mineral reservation, to which Senator Pittman responded that the initial version of the bill lacked such a reservation but faced significant opposition due to concerns it could facilitate mineral land acquisition under the guise of agricultural claims. Pittman asserted that it was Congress's policy to prevent mineral acquisition through agricultural entries, highlighting the importance of this reservation in the legislative framework.
Senator Pittman urged Senator Thomas to withdraw his amendment to prevent jeopardizing the bill, emphasizing that the government would reserve minerals separate from the lands designated for agriculture. Senator Thomas contended that water prospectors should retain any minerals discovered, proposing a complete title to 640 acres as an incentive for developing water resources. Pittman, however, expressed that such an amendment would likely lead to the bill's failure, preferring to secure what benefits the bill could provide rather than risk losing everything over a technicality. The amendment was ultimately rejected, maintaining the mineral reservation for the United States. This discussion indicates that the House likely would not have passed the bill without the mineral reservation, which was broadly articulated by Pittman, reflecting an understanding that all mineral rights were reserved to the government.
The issue of mineral rights re-emerged in the House, where Representative Blanton sought to clarify the reservation of mineral rights. Multiple representatives confirmed that mineral rights were already reserved by law, asserting that lands classified as nonmineral might still have mineral value. They noted that current homesteads do not include rights to any underlying oil, as such rights are reserved. The legislative debates further indicated Congress recognized that nonmineral classification did not imply a lack of minerals but rather signified that the land was primarily valuable for non-mineral resources. This historical context supports the government's stance that the Act did not convey mineral rights to patentees, although it is unclear whether the term "valuable" imposes any limits on the reservation. The SRHA specifically reserves "all the coal and other minerals" to the United States without the modifier "valuable," which complicates direct comparisons between the two reservations.
A fundamental principle of statutory interpretation holds that every clause, sentence, or word in a statute should be construed to avoid rendering any part superfluous or insignificant. In the context of the Pittman Act, government publications indicate that even if "valuable" was intended to limit the minerals reserved to the U.S., sand and gravel were included in this reservation. Historical data from the Department of the Interior shows significant production and value of sand and gravel from 1914 onwards, with production values reaching over $35 million by 1917.
BedRoc argues that a site-specific analysis is necessary to determine if sand and gravel are "valuable minerals," claiming that "valuable" should align with its meaning in the General Mining Act of 1872. Under this law, a prudent-man test is applied to ascertain whether a mineral deposit is commercially viable. BedRoc contends this factual inquiry makes summary judgment inappropriate.
However, the court disagrees, asserting that the usage of "valuable" differs between the two statutes. In the General Mining Law, "valuable" modifies "deposits," while in the Pittman Act, it modifies "minerals." Thus, the interpretations of "valuable" in the two contexts are not equivalent.
"Valuable minerals" and "valuable mineral deposits" are distinct terms under the General Mining Law; not all mineral deposits, regardless of the mineral's inherent value, qualify as "valuable mineral deposits." For a mineral deposit to be classified as such, it must be significant and accessible enough to warrant extraction costs. The assessment of whether a mineral reservation is applicable is a legal issue focused on congressional intent, rather than a factual, site-specific question. The interpretation of mineral reservations is guided by statutory construction principles, as illustrated in relevant case law.
The prudent-person test is relevant for determining if a mineral claim satisfies federal mining requirements, but this test does not apply to the federal government's own mineral reservations. If Congress intended to impose such a constraint on its reservations, it would have stated so explicitly.
The conclusion reached is that sand and gravel are classified as "valuable minerals" reserved to the United States under the Pittman Act, leading to the affirmation of the district court's judgment. Additionally, the document references the legislative history and context surrounding the Pittman Act, the handling of land transfers, and notes on the historical value of minerals.
BedRoc's assertion that "valuable minerals" and "valuable mineral deposits" are synonymous does not support its conclusion. The General Mining Law reinforces that sand and gravel were viewed as "valuable minerals" in the early 20th Century. The 1955 amendment specifically excluded sand and gravel from being classified as locatable mineral deposits, stating that common varieties of sand or gravel do not qualify as valuable mineral deposits under U.S. mining laws (30 U.S.C. 611). The Court in Western Nuclear highlighted the significance of this amendment, indicating that prior to 1955, sizable deposits of sand and gravel could be considered "valuable mineral deposits" under the General Mining Law. Therefore, the removal of sand and gravel from the definition of "valuable mineral deposits" by the 1955 amendment implies that they were regarded as "valuable minerals" before that year, provided the deposits were sufficient for commercial extraction.
