Ken McMASTER; Maureen E. Galitz; Steven E. Fawl, Plaintiffs-Appellants,
UNITED STATES of America; Bureau of Land Management; United States Forest Service; Kenneth Lee Salazar, Defendants-Appellees.
Argued and Submitted June 14, 2013.
[Copyrighted Material Omitted]
Steven J. Lechner (argued), Mountain States Legal Foundation, Lakewood, CO; James S. Burling and Joshua P. Thompson, Pacific Legal Foundation, Sacramento, CA, for Plaintiff-Appellants.
Robert G. Dreher, Acting Assistant Attorney General; Mark Haag and Katherine J. Barton (argued), United States Department of Justice, Environment & Natural Resources Division, Appellate Section, Washington, D.C., for Defendants-Appellees.
Appeal from the United States District Court for the Eastern District of California, Garland E. Burrell, Senior District Judge, Presiding. D.C. No. 2:10-cv-00881-GEB-EFB.
Before: A. WALLACE TASHIMA and JAY S. BYBEE, Circuit Judges, and KIMBA M. WOOD, Senior District Judge.[*]
BYBEE, Circuit Judge:
McMaster owns the Oro Grande mining claim, located in the Trinity Alps Wilderness area. In 1992, McMaster filed an application for a patent, having satisfied all of the requirements for receiving a patent under the General Mining Law of 1872. However, the Bureau of Land Management (" BLM" ) granted McMaster a patent to only the mineral estate; the surface estate was reserved to the United States. McMaster brought suit under the Quiet Title Act (" QTA" ), Administrative Procedure Act (" APA" ), and Declaratory Judgment Act (" DJA" ), seeking to quiet fee-simple title to the Oro Grande mining claim and its improvements. The district court dismissed all of McMaster's claims under Federal Rule of Civil Procedure 12(b)(6).
We affirm the district court's decision. We agree that the QTA is the exclusive means for McMaster to bring suit, and thus hold that the district court properly dismissed McMaster's APA and DJA claims. With regard to McMaster's QTA claims, we hold that McMaster did not have a " valid existing right" to a fee-simple patent when he filed his patent application, and that McMaster failed to plead with particularity the circumstances under which title to the improvements was acquired.
I. FACTS AND PROCEDURAL HISTORY
Ken McMaster, Maureen E. Galitz, and Steven E. Fawl (collectively referred to as " McMaster" ) own the Oro Grande mining claim. The Oro Grande " is an approximate[ly] 20-acre placer mining claim located approximately 45 miles northwest of Redding, California, along the South Fork Salmon River in the Trinity Alps Wilderness." The claim was originally located in 1934, pursuant to the General Mining Law of 1872.
In 1934, McMaster's predecessors-in-interest purchased the Oro Grande— formerly
called the Conrad Bar placer mine— from the claim's original locator, Edwin Lynch. The Bill of Sale conveyed title to the mining claim and all improvements, including a cabin and a shed. The claim was subsequently " relocated" three times between 1934 and 1953. The current configuration of the Oro Grande mining claim was located on June 23, 1953, and the corresponding Notice of Location noted improvements made to the claim, including a cabin and a shed. After a series of intestate successions and conveyances, the Oro Grande was conveyed to McMaster on April 5, 1991. The 1991 Joint Tenancy Deed noted the cabin and shed as improvements.
McMaster actively mines the Oro Grande mining claim when conditions permit— " when the South Fork Salmon River level is low enough ... and when access to the site is possible" — in compliance with state and federal law. There are now three structures on the Oro Grande mining claim, which are used in furtherance of mining operations: a cabin, a workshop, and an outhouse. The cabin was built in the early 1890s and is constructed of split logs and shakes. McMaster uses the workshop to process samples during the mining process and to store mining equipment during the seasons in which he is unable to mine.
On August 14, 1992, McMaster filed an application to patent the Oro Grande mining claim. On August 16, 1993, the BLM State Director for California certified that McMaster had fully complied with the requirements of the 1872 Mining Law and was entitled to the First Half Mineral Entry Final Certificate (" FHMEFC" ), " confirming that mineral entry was allowed and occurred upon the date of acceptance of the purchase price." The FHMEFC was issued by the Secretary of the Interior on December 1, 1994.
On August 4, 2000, the BLM issued a mineral report for the Oro Grande mining claim, concluding, inter alia, " [t]hat a discovery of a valuable mineral deposit of gold was made on the Oro Grande mining claim at the time it was located in 1953." An early draft of the 2000 mineral report recommended that the Oro Grande surface estate be patented along with the mineral estate, but this recommendation was ultimately revised based on an opinion issued on May 22, 1998 by the Solicitor of the Department of the Interior. See Solicitor's Opinion M-36994, Patenting of Mining Claims and Mill Sites in Wilderness Areas (May 22, 1998) (" Solicitor's Opinion" ). A second mineral report for the Oro Grande mining claim was issued on April 10, 2006, and likewise concluded that there was a discovery of a valuable mineral deposit and relied on the Solicitor's Opinion to recommend that only the mineral estate be patented.
On October 3, 2008, the BLM issued a patent for the Oro Grande mining claim. That patent was later cancelled to correct an error, and a new patent issued on February 10, 2009. The patent conveyed only " the mineral deposits within [the] association placer mining claim known as the Oro Grande Mining Claim," reserving " [a]ll title in or to the surface estate and products thereof" and " [a] right-of-way thereon for ditches or canals constructed by the authority of the United States" to the United States. Since the patent issued, the United States Forest Service has asserted that McMaster " do[es] not own the structures located on the Oro Grande mining claim."
On April 13, 2010, McMaster filed a complaint in federal district court under the Quiet Title Act, 28 U.S.C. § 2409a, to quiet title to fee-simple ownership of the longstanding mining structures and improvements located on the Oro Grande mining claim. McMaster also brought a
claim under the APA for judicial review of the BLM's action of issuing a patent conveying only the mineral estate. On June 30, 2010, the Government filed a motion to dismiss McMaster's complaint under Federal Rule of Civil Procedure 12(b)(6). The district court granted the government's motion, holding (1) that the QTA is the exclusive means for challenging the United States' title to real property, (2) that under the QTA, McMaster " did not acquire any right to a patent until [he] filed the[ ] patent application," at which time McMaster was entitled to title to only the mineral estate, and (3) that under the QTA, McMaster failed to " allege[ ] with particularity when and how [he] obtained ownership to the structures at issue." McMaster was granted leave to amend his complaint.
On September 24, 2010, McMaster filed his First Amended Complaint, which added new claims under the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02. The government again filed a motion to dismiss the amended complaint under Rule 12(b)(6), which the district court granted, dismissing McMaster's complaint with prejudice. The district court concluded that it was barred from reconsidering McMaster's APA claims by the law-of-the-case doctrine. It also dismissed McMaster's new DJA claims because it concluded that the QTA is the exclusive means for challenging the United States' interest in real property. Regarding McMaster's QTA claims, the district court concluded that McMaster had failed to remedy the problems that the court had identified in its prior dismissal order. McMaster timely appealed.
II. LEGAL BACKGROUND
A. Statutory History
The General Mining Law of 1872 (" Mining Law" ), 30 U.S.C. § 22 et seq., was enacted to permit citizens to enter and explore unappropriated federal lands in search of " valuable mineral deposits," id. § 22. Citizens who discovered mineral deposits could then secure exclusive rights to the land by meeting certain statutory requirements. Id.; see Independence Min. Co., Inc. v. Babbitt, 105 F.3d 502, 506 (9th Cir.1997). First, a claimant could validate his claim by meeting the legal requirements for " locating" and discovering the claim. See 30 U.S.C. § 28; see also Cole v. Ralph, 252 U.S. 286, 294-96, 40 S.Ct. 321, 64 L.Ed. 567 (1920). The holder of a valid, located claim is entitled to the " exclusive right of possession and enjoyment of all the surface included within the ... location[ ]," as long as he continues to meet certain requirements. 30 U.S.C. § 26; see id. § 28; see also Best v. Humboldt Placer Min. Co., 371 U.S. 334, 335-36, 83 S.Ct. 379, 9 L.Ed.2d 350 (1963). This possessory interest entitles the claim holder to " the right to extract all minerals from the claim without paying royalties to the United States," Independence Min. Co., 105 F.3d at 506, but the United States retains title to the land, United States v. Locke, 471 U.S. 84, 104, 105 S.Ct. 1785, 85 L.Ed.2d 64 (1985). Second, " an individual who possesses a valid mining claim may go through an additional process to obtain a patent," by applying to the BLM, in the Department of the Interior, and meeting additional statutory requirements. Swanson v. Babbitt, 3 F.3d 1348, 1350 (9th Cir.1993); see 30 U.S.C. §§ 29, 35; Independence Min. Co., 105 F.3d at 506. Under the General Mining Law, a patent generally conveyed fee-simple title to both the surface estate and the mineral deposits. See Independence Min. Co., 105 F.3d at 506; see also Andrus v. Shell Oil Co., 446 U.S. 657, 658 & n. 1, 100 S.Ct. 1932, 64 L.Ed.2d 593 (1980).
In 1955, however, Congress enacted the Surface Resources and Multiple Use Act, 30 U.S.C. § 601-615, which established that any unpatented claim located after the effective date of the Act could not be used " for any purposes other than prospecting, mining or processing operations and uses reasonable incident thereto," id. § 612(a); see United States v. Backlund, 689 F.3d 986, 991 (9th Cir.2012). Claimants would no longer receive the exclusive right of possession and enjoyment of the surface prior to patenting their claim; their claims would be subject to " the right of the United States to manage and dispose" of the surface of any such mining claim. 30 U.S.C. § 612(b); see Backlund, 689 F.3d at 991.
Then, in 1964, Congress enacted the Wilderness Act, 16 U.S.C. §§ 1131-36, which " established the National Wilderness Preservation System [ (" NWPS" ) ] to be composed of federally owned areas designated by Congress as ‘ wilderness areas,’ " id. § 1131(a). The stated purpose of the Wilderness Act was to " secure for the American people of present and future generations the benefits of an enduring resource of wilderness" by creating and administering wilderness areas " for the use and enjoyment of the American people in such manner as will leave them unimpaired for future use and enjoyment as wilderness, and so as to provide for the protection of these areas, [and] the preservation of their wilderness character." Id. The Wilderness Act also represented a compromise between mining and preservation interests. See Kenneth D. Hubbard et. al., The Wilderness Act's Impact on Mining Activities: Policy Versus Practice, 76 Denv. U.L.Rev. 591, 591-92, 597 (1999). Section 1133(d)(3), in particular, was a product of this compromise, see id. at 591-92; it limited the creation of future mining interests, while preserving some pre-existing mining interests and providing a grace period for discoveries. See 16 U.S.C. § 1133(d)(3). " [S]ubject to valid existing rights," patents that issued after the effective date of the Wilderness Act, would convey title only to the mineral deposits, with the surface estate being reserved to the United States. Id. New claims could also be located under the Act, but only until December 31, 1983. Id. After December 31, 1983, no patent would issue to claims located within a wilderness area, " except for valid claims existing on or before December 31, 1983." Id. And " [s]ubject to valid rights then existing," beginning on January 1, 1984, " all forms of appropriation under the mining laws" would no longer apply to any lands designated as wilderness areas. Id.
Twenty years later, the California Wilderness Act of 1984 made the Wilderness Act applicable to the Oro Grande mining claim as of September 28, 1984. Pub.L. No. 98-425, Title I, § 101(a)(34) (1984).
B. Regulatory History
In 1966, the BLM promulgated a regulation to implement § 1133(d)(3) of the Wilderness Act. See 43 C.F.R. § 3638.5 (1996) (" the regulation" ). The regulation states that any " patent issued under the U.S. mining laws for mineral locations established after [the effective date of the Wilderness Act], or validated by discovery of minerals occurring after [the effective date of the Wilderness Act]," would convey title only to the mineral deposits and would reserve title to the surface of the land to the United States. Id. Although § 3638.5 does not directly address whether such a reservation of surface rights to the United States applied to unpatented claims located prior to the effective date of the Wilderness Act, in practice, the BLM regularly conveyed fee-Simple patents to such claims. See Solicitor's Opinion at 1, 19-20. In 1981, the BLM also published a policy
stating that " [a] patent conveying both surface and mineral rights may be issued on a valid claim located prior to the date the area was included as part of the National Wilderness Preservation System." Bureau of Land Management, Wilderness Management Policy, 46 Fed.Reg. 47,180-01 (1981) (" BLM policy" ) (emphasis added). And in 1991, the BLM issued a manual stating that " [f]or claims located before enactment of the Wilderness Act ... the claims must have a discovery as of the date of enactment to acquire the surface and mineral estates," BLM Manual H-3860-1, Mineral Patent Application Processing, VIII-7 (1991) (" the Manual" ).
On May 22, 1998, the Solicitor of the Department of the Interior issued Opinion No. M-36994 disagreeing with BLM's practice of conveying fee-simple patents to all valid claims located before the wilderness designation. See Solicitor's Opinion at 20. The Solicitor's Opinion recognized the BLM's policies and practices, see id. at 19-20, but ultimately instructed the BLM to follow a new policy:
[M]ineral patents issued under the Mining Law for lands within the wilderness areas ... should convey only the mineral deposits within the claim, unless the mining claim for which the patent is sought was located and validated by a discovery prior to designation of the wilderness area and the claimant complied with all the requirements for obtaining a patent under the Mining Law prior to the wilderness designation, as determined by the Secretary.
Id. at 21. This interpretation specified that the new policy should " be applied to ... currently pending applications." Id.
McMaster appeals the district court's dismissal of his QTA, APA, and DJA claims, arguing that he is entitled to fee-simple title to the surface estate of his claim. " We review de novo the district court's dismissal for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6)." Stone v. Travelers Corp., ...