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"Petition to Interior Secretary in 'Comparative Value' Case Threatens Longstanding Mining Claim Validity Doctrine Under The 1872 Mining Law," Crowell & Moring Mining Law Monitor

July 1998

Author: R. Timothy McCrum.

On February 10, 1998, the Interior Board of Land Appeals ("IBLA") issued its decision in United States v. United Mining Corporation. In the ruling, the Board upheld the validity of placer mining claims in Idaho for an uncommon variety of decorative stone. The claims had been located under the 1872 Mining Law, as amended by the 1892 Building Stone Act.

The Board's decision would have been unremarkable except that it overruled a 1994 decision which had invalidated the mining claims on grounds that the value of the lands in question for environmental and aesthetic preservation purposes outweighed their value for mining purposes. In the overruled decision, Administrative Law Judge (ALJ) Ramon Child invalidated the claims using the "comparative value" test, even though he found that the mineral deposits could be worked at a profit and therefore satisfied the longstanding "prudent person" test of mining claim validity. The latter test had been articulated in Castle v. Womble by the Interior Department in 1894 and followed over the past century in innumerable Departmental and federal court decisions, including several decisions of the U.S. Supreme Court. ALJ Child might have confined his ruling to the 1892 Building Stone Act, which allowed mining locations only upon lands "chiefly valuable" for minerals, but instead he held that the comparative value test of mining claim validity was the true test for all mining claims under the 1872 Mining Law. In so ruling, he relied upon a 1987 book authored by John Leshy (now Solicitor of the Interior Department), The Mining Law, which embraced the comparative value doctrine and criticized Board precedent over the past two decades which had repudiated the doctrine.

Although the Board reversed the ALJ, it did so in a split decision, with four of the ten judges of the Board dissenting. The stage is now set for Secretary Babbitt, with the assistance of Solicitor Leshy, to enter the controversy. On April 27, 1998, a petition for Secretary Babbitt to assume personal jurisdiction over the case was filed with the Department by the Western Mining Action Project of Boulder, Colorado, on behalf of the environmental group intervenors in the case. Notably, the Solicitor's Office was already on record in this case before the Board supporting affirmance of the ALJ's 1994 decision. The nearly 40-page petition for Secretarial review pleaded, in part:

If ever a case called for Secretarial review - this is it. The majority's decision overturns years of concerted effort and work by the BLM and Regional Solicitor's Office. Judge Child's decision was the culmination of a lengthy evidentiary hearing in which all sides fully presented their case. His decision was squarely based on over a century of Supreme Court and other federal court case law, as well by [sic] Department decisions dating from within a few weeks of the enactment of the 1872 Law itself.

[T]he IBLA majority overturned Judge Child's ruling on one of the most critical aspects of federal public land law - the Department's authority to determine the validity of mining claims. As shown below, Judge Child's view of the "comparative value test" is not only legally sound, its use in this case was fundamentally necessary based on the irreplaceable resources at stake and the marginal value of the "minerals" to be mined. Thus, based not only on the law and the facts, but also on sound public policy, the Secretary should reverse the majority's decision and reinstate the applicability of the comparative value test.

On June 8, 1998, the National Mining Association filed an amicus curiae brief with the Office of the Secretary supporting the IBLA's decision and opposing the legal arguments set forth in the petition for Secretarial review. Nonetheless, our sources tell us that the petition is being considered quite seriously within the Solicitor's Office. Solicitor Leshy previously has shown little hesitancy in changing longstanding interpretations regarding the administration of the 1872 Mining Law - prime examples being the 1993 administrative mineral patent moratorium and the more recent 1997 Solicitor's opinions on millsites and related patenting issues.

If Secretary Babbitt and Solicitor Leshy reverse the Board's decision in United Mining and adopt the ALJ's rationale, it would radically weaken the rights traditionally associated with unpatented mining claims. Under a comparative value test, unpatented mining claims could be challenged essentially on the basis that the Interior Secretary believed that competing values of the public lands - for example, recreation, or environmental or cultural preservation - outweigh the economic value associated with the mineral deposit. Such challenges could be made by the Secretary at the stage of a mineral patent application, or through a discretionary contest action initiated at any time, presumably including the point at which a plan of operations is submitted for developing a mine. Essentially, such an administrative ruling - accomplished in an adjudication without notice-and-comment rulemaking - would grant to the environmentalists the "unsuitability" standard which they have sought unsuccessfully through legislation over the past decade. If Secretary Babbitt adopts the comparative doctrine, a vigorous judicial challenge by the industry seems almost certain to follow.

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R. Timothy McCrum
Partner – Washington, D.C.
Phone: +1 202.624.2752
Email: rmccrum@crowell.com