886 F2d 334 United States v. H Rice E

886 F.2d 334

Unpublished Disposition

NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.

UNITED STATES Of America, Plaintiff-Appellee,
v.
Lee H. RICE, and Goldie E. Rice, Defendants-Appellants.

No. 88-2550.

United States Court of Appeals, Ninth Circuit.

Submitted April 13, 1989.*
Decided Sept. 15, 1989.

Roger G. Strand, District Judge, Presiding.

Before WILLIAM A. NORRIS, BEEZER, and BRUNETTI, Circuit Judges.

I.

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1

MEMORANDUM*

OVERVIEW

2

Appellant miners, Lee and Goldie Rice, appeal the district court's granting of partial summary judgment and award of damages in favor of the government affirming a decision of the Interior Board of Land Appeals (IBLA). The IBLA found appellants' ten unpatented mining claims invalid for lack of discovery of valuable minerals. Appellants were ordered to vacate the claims and pay damages of $11,491.64 plus interest representing rent and cost of removal of fixtures to the United States. We affirm the judgment of the district court except for its award of damages, which we reverse and remand for recalculation.

STANDARD OF REVIEW

3

We review the district court's granting of summary judgment de novo. Sagebrush Rebellion v. Hodel, 790 F.2d 760, 763 (9th Cir.1986). The court of appeals will not disturb an award of damages unless it is clearly unsupported by the evidence. Chalmers v. City of Los Angeles, 762 F.2d 753, 760 (9th Cir.1985). The court of appeals may review the underlying decision of the IBLA from the same position as the district court, that is, within a limited scope. Marathon Oil Co. v. United States, 807 F.2d 759, 765 (9th Cir.1986), cert. denied, 480 U.S. 940 (1987); Dredge Corp. v. Conn, 733 F.2d 704, 707 (9th Cir.1984). We must affirm the IBLA decision if after examining the entire administrative record, we determine the administrative decision is supported by substantial evidence and is in accordance with the law. Lara v. Secretary of the Interior, 820 F.2d 1535, 1540 (9th Cir.1987); Baker v. United States, 613 F.2d 224, 226 (9th Cir.) ("Our review is limited to an examination of whether the decision of the IBLA was arbitrary, capricious, an abuse of discretion; unsupported by substantial evidence, or not in accordance with the law."), cert. denied, 449 U.S. 932 (1980); 5 U.S.C. Sec. 706(2)(a). We give great deference to the Department of Interior's interpretations of its law which it is charged with administering if well reasoned and consistent with other agency decisions. Lara, 820 F.2d at 1538; Baker, 613 F.2d at 226-27.

FACTS AND PROCEEDINGS

4

This appeal involves ten unpatented mining claims located on federal lands within the Coronado National Forest, in Pinal County, near Oracle, Arizona. Appellants located the first two claims in 1953 ("Golden Earth" and "Silver Earth"), three in 1954 ("Good Earth," "New Year # 1" and "New Year # 2"), one in 1956 ("Goldie's Fraction"), one in 1961 ("Calcium Carbonate"), and the last three in 1963 ("Diabase Ridge," "Three Sons" and "Lee's Fraction"). The Rices have had a residence on the "Silver Earth" claim since August, 1954. The area is surrounded by other mining organizations, such as Magma Copper company (subsidiary of Newmont), YMCA tungsten mine, Tigre Mine, Little Hill Mines and the Oracle Ridge Mining Partners and the 3C Ranch which had four patented claims and 318 unpatented claims. The appellants' claims are located in the Old Hat Mining District.

5

A. The Wilson Report.

6

In 1958, Robert E. Wilson, a Forest Service mining engineer, prepared a mineral report to determine the surface rights to three of the Rices' claims: The Golden Earth, Silver Earth and Good Earth claims. Page three contains information cited by appellees and the IBLA which says that the mineralization on the claims "is not generally considered to be the type of mineralization from which any appreciable production of valuable minerals can be expected." Wilson opined that the Rices "purchased the property for a home site" and did not intend to develop the property as a mining claim. However, the Wilson report does state that the Rices had made a valid discovery of minerals on the Golden Earth and Silver Earth claims. The Wilson report further found that no valuable discovery had been made on the Good Earth claim.

7

On February 9, 1962, the Rice's home was burned during the early morning hours, slightly injuring Goldie Rice and their eldest son. They lost much of their possessions in the fire. Six weeks later, on March 28, John Waters, District Ranger for the Santa Catalina district of the Coronado National Forest stopped by the Rices' tents informing them not to rebuild as their claims were going to be "re-examined for validity" in the near future. He also informed the Rices that a land exchange with the 3C Ranch was pending and stated this was the reason for the reexamination of their claims. He followed up with a letter to the Rices with the same information.

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8

B. The 1968 Contest.

9

Between 1962 and 1965, Jack Pardee and Gilbert Matthews, Forest Service mineral examiners, examined the claims and issued a report on May 27, 1966. The report concluded that none of the Rices' ten claims met the "valid discovery of valuable minerals" criteria necessary to maintain possession of the claims. While gold and silver were found on the claims, the quartz veins were narrow and discontinuous, causing the operating costs to greatly exceed the value of any extracted minerals. This led to a contest proceeding initiated by the Forest Service held on December 6, 1967 at which the Rices were represented by counsel. Pardee and Matthews testified concerning their report, repeating that there had been no discoveries of any valuable mineral deposits on the claims. Pardee also testified that none of the 3C Ranch claims had been challenged. The Rices' expert testified that the claims had sufficient economic potential to allow the extraction of gold, silver, iron ore and tungsten minerals at a profit but could quote no exact figures concerning the ore resources or the costs involved. Appellants did not show any evidence of actual mineral production save for the sale of some tungsten. The BLM examiner issued a decision declaring all the mining claims to be invalid for lack of a valuable mineral discovery. The IBLA dismissed the appeal for failure to timely serve the Forest Service. United States v. Rice, 2 IBLA 125 (1971). The government then sued in district court for possession of the land and damages. The district court vacated the IBLA's ruling and remanded the case for a new hearing in spite of the failure of service. United States v. Rice, D.Ariz., No. Civ. 72-467-PHX WHC (1972).

10

C. The 1978 BLM Hearing and IBLA Appeal.

11

In March, 1978, more evidence was presented at a new hearing, at which the Rices were again represented by counsel. Raj Daniel, another Forest Service mineral examiner, had viewed the claims, taken additional mineral samples and testified that the costs of extracting the minerals would exceed their value. He distinguished the surrounding successful mining claims from the Rices' claims by noting that the other claims were situated on or near a geological formation known as the Mogul Fault, whereas the Rices' claims were located on a completely different type of geological structure. Pardee and Matthews, who testified again, agreed with Daniel's conclusions.

12

Two witnesses testified on behalf of the Rices. One was Louis Osmer, a field consultant for Western Resources Company. Western Resources had entered into a lease arrangement with the Rices in 1975, but had withdrawn its exploration efforts due to the uncertainty of the ownership of the claims. The second witness was Richard Lundin, a mineral exploration consultant. Lundin said the Rices had made discoveries on six of the ten claims ("Golden Earth," "Silver Earth," "New Year No. Two," "Calcium Carbonate," "Diabase Ridge," "Three Sons"). From the point of view of a "family mine" and with the proper expertise, Lundin concluded that the mine could be operated at a profit on a "shoestring" using the Rices' machinery and equipment. During cross-examination, Lundin stated that as to the "Silver Earth" claim, he relied on the best four of fourteen samples taken by the Forest Service in 1967, that none of the six would be profitable to a commercial mining operation, that the claims would have to be mined selectively and that he did not take depreciation costs into consideration in his estimates. He was also unsure that "Three Sons" would produce a profit on its own. Lee Rice testified in his own behalf, stating that he had sold about 450 pounds of tungsten concentrate from various claims, and believed he could make a profit from the six claims mentioned above if the government would leave him alone to mine.

13

The Administrative Law Judge (ALJ), in a written decision dated June 28, 1979, stated that the Rices had not shown a discovery of any valuable minerals on any of the claims within the meaning of the mining laws and found all the claims invalid. The ALJ specifically found that although gold and silver were present, the narrowness of the veins and the cost of getting to them would not induce a prudent person to expend labor and time developing the claims for those minerals. United States v. Rice, ALJ decision at 14 (June 28, 1979). The sale of tungsten was not persuasive evidence because no evidence of cost of operation was introduced. Id. Further, although the presence of ore was shown along with market demand, there was no evidence of the volume or cost of extraction. Id. The Rices, with counsel, appealed to the IBLA, seeking reversal on the six claims Lundin testified had valuable mineral discoveries. The Rices did not appeal the remaining four claims. The IBLA affirmed the ALJ, addressing both the merits of the discoveries on the claims and the allegations of the Forest Service conspiracy (see part II(C) infra). United States v. Rice, 73 IBLA 128 (1983). The ALJ ruling, as commented on by the IBLA, found that the Wilson report was made to determine surface rights and was not a mining claim contest and therefore was not binding on the ALJ. See United States v. Rice, 73 IBLA 128, 132 (1983). The Wilson mineral report, twenty years old now, did not address whether the minerals could be extracted at a profit. 73 IBLA at 132. In mining claim contests, a determination is made beyond whether minerals exist in the claim; evidence must also show that a person of ordinary prudence would "be justified in further expenditure of his labor and means with a reasonable prospect of success in developing a valuable mine." United States v. Rice, 73 IBLA at 132. The IBLA then analyzed the six claims upon which discoveries had allegedly been made to determine under the "prudent person" standard and the "marketability" test whether a prudent person would attempt to invest money and mine the claims. The IBLA concluded that any attempt to operate the claims would result in a net loss. 73 IBLA at 137. The IBLA, based upon this analysis, affirmed the ALJ's decision invalidating all ten of the claims.

14

D. The Current Litigation.

15

The government then brought this action in district court to recover possession of the claims and for damages of the reasonable rental value of the lands, going back to February 9, 1962, coincidentally the same date that the Rices' house burned down. The Rices, in pro per, answered and counterclaimed for patent of the claims and damages for government harassment. The district court granted partial summary judgment in favor of the government upholding the IBLA's 1983 decision invalidating the claims. The district court dismissed the Rices' counterclaims for failure to exhaust administrative remedies, as barred by sovereign immunity and barred by the statute of limitations. Then the court held a bench trial on the damage issues. The Rices, dismayed that the summary judgment was granted without a hearing, were allowed to read into the record their opening statement concerning their claims against the government and to introduce exhibits which related to the issues already determined in the summary judgment decision. They did not present evidence rebutting the government's expert witness who testified to the reasonable rental value of the Silver Earth claim as $9,279.41. The government introduced further testimony as to the cost of removing the improvements on the claim and restoring the property to its "natural" condition. The district court held that the Rices had no valid basis against the government to remain in possession, granted possession to the government and awarded the government $11,491.64 plus interest, in rental and restoration damages. The Rices appeal this decision.

II.

DISCUSSION

16

A. Validity of the Mining Claims.

17

The general mining law of 1872, 30 U.S.C. Sec. 22, et seq., provides that citizens may enter and explore federal lands and search for minerals. Andrus v. Shell Oil Co., 446 U.S. 657, 658 (1980). In order for a mineral claim on federal lands to be valid, the mineral locator or miner must show that he or she has made a "valuable mineral discovery." 30 U.S.C. Sec. 22 (1986); Barrows v. Hickel, 447 F.2d 80, 82 (9th Cir.1971). The Rices unpatented mining claims have been declared invalid for lack of a "valid discovery of valuable minerals." Because we look at the district court's grant of summary judgment de novo, the issue is whether substantial evidence supports the finding of the IBLA that the mining claims were invalid for lack of discovery of a valuable mineral. Lara, 820 F.2d at 1542.

18

The government must establish with sufficient evidence the prima facie case showing the invalidity of the contested claims, and then the burden of proof shifts to the claimant to show by a preponderance of the evidence that his claim is valid. Lara v. Secretary of Interior, 820 F.2d 1535, 1542 (9th Cir.1987); Humboldt Placer Mining Co. v. Secretary of Interior, 549 F.2d 622, 624 (9th Cir.), cert. denied, 434 U.S. 836 (1977); Hallenbeck v. Kleppe, 590 F.2d 852, 856 (10th Cir.1979). A prima facie case for the government is made when the mineral examiner testifies he has examined the exposed workings and found no mineralization sufficient to support the finding of a discovery. Lara, 820 F.2d at 1542. The examiner is not required to perform discovery work for the claimant, or to explore or sample beyond those areas which have been exposed by the claimant, as the examiner simply verifies whether a discovery has been made. Id.; Hallenbeck v. Kleppe, 590 F.2d at 859. The mining claimant, not the government, bears the ultimate burden of proof. Lara, 820 F.2d at 1542.

19

The courts have developed two complementary tests for determining whether a mineral discovery is "valuable." Under the "prudent person" test the "discovered deposits must be of such a character that 'a person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success, in developing a valuable mine....' " Baker v. United States, 613 F.2d 224, 225 (9th Cir.), cert. denied, 449 U.S. 932 (1980) (quoting Castle v. Womble, 19 L.D. (Land Department) 455, 457 (1894)); see also Lara, 820 F.2d at 1541. Profitability is an important consideration in the application of this test, and thus, the Supreme Court adopted the "marketability test". United States v. Coleman, 390 U.S. 599, 602-03 (1968) ("[T]he prudent-man test and the marketability test are not distinct standards, but are complementary in that the latter is a refinement of the former."). At the time of discovery of the minerals, a market for the discovered material must be sufficiently profitable to attract the efforts of a person of ordinary prudence. Barrows, 447 F.2d at 83. To satisfy the marketability test, the claimant miner must show that the mineral can be extracted and marketed at a profit. Coleman, 390 U.S. at 600; Barrows v. Hickel, 447 F.2d at 82-83; Baker, 613 F.2d at 226.

20

There are two main factors to consider to determine if the claimant's material could be marketed at a profit: The cost factor and the demand factor. Melluzzo v. Morton, 534 F.2d 860, 864 (9th Cir.1976). The cost factor looks to the cost of extraction, preparation for market and transportation costs. The demand factor asks whether local demand can "absorb additional material such as the claimant's and still permit an attractive profit to be realized." Id. The claimant, in order to rebut the government's case, must meet the prudent person and marketability tests which are questions of fact. Hallenbeck, 590 F.2d at 859.

21

Pardee and Matthews examined the claims from 1962 through 1965, and while finding the presence of gold and silver, concluded that the quartz veins were too narrow and discontinuous to be profitable. Their conclusions were supported by Daniel's sampling of the claims in 1978. This satisfies the government's prima facie case. Lara, 820 F.2d at 1542. In Lara, the government's prima facie case consisted of samplings from both 1973 and 1979 taken by its mineral examiner which showed a similar lack of valuable mineral discovery.

22

The Rices offered the following rebuttal evidence: 1) that the examiners did a poor job of examining the claims; 2) that the surrounding successful mines show their claims are also valuable; 3) that the contract with Western Resource Company shows the potential for valuable minerals; 4) that the Wilson Report declared at least two of their claims to be valid; 5) that Lundin's testimony supports the validity of six of the claims; 6) that the sale of tungsten shows a valuable mineral discovery; 7) that the Forest Service prevented them from properly developing their claims; 8) that they are not required to actually sell the minerals and exploit the claims.

23

The claimant in Humboldt Placer Mining Co. v. Secretary of Interior, 549 F.2d 622, 624 (9th Cir.), cert. denied, 434 U.S. 836 (1977), also criticized the government's mineral examiner and complained about his methods. As the claimant bears the ultimate burden of proof, the claimant must present evidence to rebut the government's case. Lara, 820 F.2d at 1542. Criticizing the government's examiners is not rebuttal evidence as the examiners have no duty to search for a discovery. Id.; Hallenbeck, 590 F.2d at 858-59.

24

The evidence that the surrounding mines are successfully producing does not rebut the government's evidence. Not only did Daniel point out that the Rices' claims were not located on the Mogul Fault which the other mines were, but also discovery must be actually made on the claim itself. Humboldt, 549 F.2d at 624. In Humboldt, most of the mining company's case was based on the fact its claims were on the Weaverville Formation, success of which was established by the LaGrange mine. The panel there concluded that while the LaGrange proximity might persuade a reasonable prospector to search for valuable minerals, that prospector must succeed in his search before "discovery" occurs. Humboldt, 549 F.2d at 624 (citing Henault Mining Co. v. Tysk, 419 F.2d 766, 768 (9th Cir.1969), cert. denied, 398 U.S. 950 (1970)). The Rices' argument that the contract with Western Resource Company is evidence of a valuable mineral discovery fails for the same reason. Western Resources had not produced any minerals from the claim but was still involved in exploration when they withdrew from the claims during the contest with the government. "A reasonable prediction that valuable minerals exist at depth will not suffice as a 'discovery' where the existence of these minerals has not been physically established." Henault Mining Co., 419 F.2d at 768.

25

The Wilson report, as explained by the ALJ, and whose reasoning was adopted by the IBLA, concerned surface rights and did not analyze the mineral discovery under the prudent person or marketability test to determine if a prudent person could profitably extract the minerals. Converse v. Udall, 399 F.2d 616, 619 (9th Cir.1968) ("finding of some mineral, or even of a vein or lode, is not enough to constitute discovery--their extent and value are also to be considered"), cert. denied, 393 U.S. 1025 (1969). The later examinations showed that the presence of the minerals was not enough to be "marketable" and thus failed the test for a valuable mineral discovery. Lundin's testimony failed to present specific evidence of costs and demands to support a finding of marketability, was cast in general terms and supported only six of the ten claims. The sale of ore as evidence of a valuable mineral discovery was refuted by the government when it showed that the highest possible price between the two available buyers was still $1.14 below the cost of producing the ore. See 73 IBLA at 134.

26

While actual successful exploitation of a mining claim is not required to satisfy the "prudent person" test, the potential for profitable marketing and actual discovery must exist. Barrows, 447 F.2d at 82; Melluzzo v. Morton, 534 F.2d 860, 863 (9th Cir.1976) (absence of proof of actual sales is relevant but not conclusive and may be overcome by other evidence of marketability). Thus, while the Rices are not required to actually sell their minerals, they have failed to show that if they did attempt to mine and market minerals they could do so successfully.

27

The Forest Service actions, that is, the various challenges, examinations and proceedings to invalidate the mining claims, are not a defense for failure to discover valuable minerals. First, the IBLA found that a cordial relationship existed between the Rices and the Forest Service, where the Forest Service postponed the hearing on the claims a number of times to allow the appellants' expert witness more time to complete his examination of the claims. 73 IBLA at 131. Also, the fact that the Forest Service was challenging the validity of the claims should have been an incentive for the Rices to develop the claims, thus producing the proper evidence to rebut the government's case. Further, the IBLA notes that in spite of the alleged Forest Service conspiracy, the Rices agreed that the case should be resolved on the merits of the valid mineral discovery. Id.

28

The government established its prima facie case and the Rices failed to rebut this with evidence of a valuable mineral discovery which a prudent person could mine at a profit. Thus, substantial evidence supports the finding of the IBLA and the district court did not err in granting summary judgment in favor of the government.

29

B. Damages.

30

The district court held a bench trial concerning the issue of damages because the court found there existed material questions of fact concerning the amount of damages the United States could collect. United States v. Rice, D.Ariz., Civ. 84-2330 PHX RGS, at 2 (1988). The court of appeals will not disturb an award of damages on appeal unless it is clearly unsupported by the evidence. Chalmers, 762 F.2d at 760. The district court awarded the government damages for back rent, for removal of structures and for prejudgment interest. Appellants first dispute the government's authority to assess rent and interest. However, as the district court notes in its conclusions of law, the United States is entitled to recover the reasonable value of past rent for the use of land in the case of trespass. See 30 U.S.C. Sec. 612; United States v. Nogueira, 403 F.2d 816, 825 (9th Cir.1968). The government is also entitled to recover prejudgment interest, United States v. California State Board of Equalization, 650 F.2d 1127, 1132 (9th Cir.1981), aff'd, 456 U.S. 901 (1982), and the reasonable costs of removing structures and restoring the land to its natural state. United States v. Brunskill, 792 F.2d 938, 940 and n. 1 (9th Cir.1986); United States v. Goldfield Deep Mines Co., 644 F.2d 1307, 1309 (9th Cir.1981), cert. denied, 455 U.S. 907 (1982). See also 30 U.S.C. Sec. 612 ("Any mining claim ... shall not be used, prior to issuance of patent therefor, for any purposes other than prospecting, mining or processing operations and uses reasonably incident thereto."). It is clear from these authorities that the United States may collect damages for use of mining claims for purposes other than mining.

31

There is no statute of limitations to bar the government from establishing title or gaining possession of real or personal property. 28 U.S.C. Sec. 2415(c). However, a statute of limitations does apply to damages for trespass actions, such as the one here.

32

Subject to the provisions of section 2416 of this title (tolling provisions), ... every action for money damages brought by the United States ... which is founded upon a tort shall be barred unless the complaint is filed within three years after the right of action first accrues: Provided, That an action to recover damages resulting from a trespass on lands of the United States ... may be brought within six years after the right of action accrues ...

33

28 U.S.C. Sec. 2415(b) (1988 Supp.) (emphasis added). Also, 28 U.S.C. Sec. 2415(g) provides that any "right of action subject to the provisions of this section which accrued prior to the date of enactment of this Act shall, for purposes of this section, be deemed to have accrued on the date of enactment of this Act." This means that any claim prior to July 18, 1966 shall accrue on that date.

34

The first action by the government against the Rices was filed on August 24, 1972. This is more than six years after the enactment of 2415(g) and would bar any recovery for damages prior to 1966. But, that district court action ended in a remand for a new administrative hearing and was not appealed by the government. There is no tolling provision in Sec. 2416 for administrative hearings. The next district court action was brought December 13, 1984. Thus, as no tolling provisions were in effect, Sec. 2415(b) limits the government's damages to six years prior to the commencement of the second action, that is, to December 13, 1978.

35

The Rices did not particularly raise this issue, however, they are appealing pro se and the district court specifically dealt with it and found that Sec. 2415 did not bar the government's action as it had not "technically accrued." District Court Order of April 14, 1988. This is clearly erroneous. The statute specifically addresses trespass damages, and states that the right of action begins to accrue as soon as trespass begins, not when the government incurs expenses. Thus, the district court should redetermine damages, calculating them from December 13, 1978.

36

C. Conspiracy and Fraud Claims.

37

The appellants allege that the challenge to their mining claims came as part of a Forest Service conspiracy to deprive them of their land, and to expedite a pending land exchange with the 3C Ranch. The IBLA opinion discussed this issue at length. 73 IBLA at 130-32. The district court in its partial summary judgment order treats the allegations as counterclaims and declares them barred by sovereign immunity, by the failure to exhaust administrative remedies and by the statute of limitations. Whether or not the Forest Service conspired to deprive the Rices of their mining claims, the Rices still must meet the statutory requirements to maintain possession of those claims, and they did not do so.

38

The facts on which the Rices base their allegations begin with the burning of their house. They contend the Forest Service, which has been rumored to engage in self help and which had been seen around the Rices' claims right before the fire, burned their home to help convince them to move because of the pending land exchange with the 3C Ranch. This happened in 1962 at which time the Rices were aware of the same facts they allege now. The statute of limitations on this action has passed.

39

They also allege selective enforcement of the mining laws as none of the claims of the 3C Ranch or other large neighboring mining companies were subject to the validation examination. First, as appellees point out, the Forest Service has the right to selective enforcement of its laws and regulations unless that selectivity is based upon race, religion, or other arbitrary and forbidden classifications. Oyler v. Boles, 368 U.S. 448, 456 (1962). As the IBLA and the ALJ found, the Forest Service was not concerned with the 3C Ranch claims as the Ranch was going to relinquish those claims as part of the land exchange. 73 IBLA at 131. The IBLA further concluded that "[e]ven if questionable motives were established, the Board would adjudicate the validity of the claims. The fact that particular claims, but not others in the same general area, are contested does not constitute a denial of due process." 73 IBLA at 132; see also Lara, 820 F.2d at 1539 ("there is no due process violation if the party proceeded against 'understood the issue' and 'was afforded full opportunity' to justify his conduct.").

40

Second, the Forest Service is unable to check the validity of all claims:

41

Because of the vastness of the public domain and the lack of personnel and funding adequate to make a detailed examination of all of it, the government does not usually institute a contest unless the location comes to its attention unfavorably or it has conflicting uses for the land.

42

2 American Law of Mining p 50.01 (1982).

43

Third, unless the land is patented, the Rices' interest in the claim is always subject to challenge by the Department of Interior. The nature of the property interest in "[a] mining claim on public lands is a possessory interest in land that is 'mineral in character' and as respects which discovery 'within the limits of the claim' has been made." Best v. Humboldt Mining Co., 371 U.S. 334, 335 (1963) (quoting Cameron v. United States, 252 U.S. 450, 456 (1920)). The Secretary of Interior, acting through the Department of Interior's officials whose duty is to supervise public business on public lands, including mines, has the "power and authority to initiate a contest to see 'that valid claims may be recognized, invalid ones eliminated, and the rights of the public preserved.' " Davis v. Nelson, 329 F.2d 840, 846 (9th Cir.1964) (quoting Cameron v. United States, 252 U.S. 450, 460 (1920)). "Establishment of clear title to public lands is itself sufficient justification for" initiating contest proceedings. Davis, 329 F.2d at 846. The Secretary of Interior has continuing jurisdiction over unpatented mining claims and has the duty upon proper notice and hearing to determine if a mining claim is valid. Ideal Basic Industries, Inc. v. Morton, 542 F.2d 1364, 1367-68 (9th Cir.1976). Therefore, the Forest Service had the right to challenge the claims for any reason, and no allegation of misconduct on its part is a defense against a finding that the claims are invalid.

44

D. Other Claims.

45

Appellants' other claims are erroneously based on their misconception of their property right in the claim. They allege the government is "taking" their property without just compensation, that they have adverse possession of the land, that going back and reexamining the land after the Wilson report was "ex post facto," that the government interfered with their contractual relations with Western Resources and that they were deprived of due process.

46

First, the government, that is, the Secretary of Interior has a duty and a right to continue to examine unpatented mining claims to assure that they comport with the law. Ideal Basic Industries, 542 F.2d at 1367-68. Thus, there is no "taking." Second, no title to public lands can be obtained by adverse possession, laches, or acquiescence. Sweeten v. United States Dept. of Agr. Forest Service, 684 F.2d 679, 682 (10th Cir.1982) (citing United States v. California, 332 U.S. 19, 39-40 (1947)); see also 28 U.S.C. Sec. 2409a(n) (West Supp.1989) ("Nothing in this section shall be construed to permit suits against the United States based upon adverse possession."). The "Color of Title Act" does not authorize adverse possession here either because the Rices knew the title to land was in the United States. 43 U.S.C. Sec. 1068. The "ex post facto" and interference with contract arguments fail as the Rices have no right not to comply with the law, and without a valid mining claim cannot assert the validity of their claim against the United States. Best v. Humboldt Mining Co., 371 U.S. 334, 336 (1963) (A locator who does not take his claim to patent takes the risk that his claim will no longer support the issuance of a patent for a lack of valuable minerals); United States v. Deasy, 24 F.2d 108, 111 (N.D.Idaho 1928) (A locator has a possessory title which is good against the United States only so long as he complies with the law.). Finally, there is no due process claim here. See Lara, 820 F.2d at 1539-40.

III.

CONCLUSION

47

The Rices have failed to show discovery of valuable minerals under either the "prudent person" or the "marketability" tests, therefore the granting of summary judgment on these issues by the district court was proper. There are no other valid claims against the government. That part of the district court's decision is affirmed. However, we reverse the award of damages and remand for recalculation of damages in accordance with this memorandum disposition.

48

AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

*

The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); Circuit Rule 34-4

**

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Circuit Rule 36-3